Retail Therapy: As Retail Media Advertising Grows, Marketers Must Prioritize Metrics (New Report)

Retail media ad spend is forecast to reach nearly $60 billion this year and almost $110 billion by 2027. 

It’s growing “faster than search, faster than social, and is still growing in double digits year-over-year,” says Michelle Urwin, vice president of marketing for Skai, which just teamed up with The Path to Purchase Institute to dive deeper into the “fastest-growing channel in advertising history.”

Surveying agency and consumer product manufacturer professionals, the research found more than three-quarters (77%) found retail media networks to be good or excellent at meeting their KPI goals and expectations in 2023. 82% said retail media was extremely or very important to their organization, with paid search coming in second (80%) and programmatic display third (70%). 

“When asked what would accelerate their organization’s investment in retail media in the future, nearly half of those surveyed said investment in retail media would accelerate if it delivered a higher ROI compared to other channels,” writes P2PI’s Cyndi Loza. “Additionally, improved insights from retailer media networks and the ability to better measure upper funnel impact would fuel further investment.”

For more than half of the respondents (53%), limitations in analytics and reporting are a critical challenge that would limit their spending in retail media. 41% said they’d invest less if there was a lower ROI compared to other advertising channels, along with 38% who pointed to difficulty in proving investment incrementality.

(Source: P2PI)

“Our survey indicated there’s need for improvement when it comes to measuring incrementality,” writes Loza, alluding to the half of those surveyed who had concerns with their limited tools. “While a majority of respondents (56%) shared their organizations measure incrementality at a base level, only 30% reported their organizations are good/extremely good at measuring incrementality and applying or leveraging the insights.”