The Long-Term Play: Why Awareness and Brand Loyalty Matter More Than ROAS

In 2024, the evolution of the retail media sector presents brands with novel challenges in effectively gauging the impact of their advertising campaigns.

This growth spurt brings with it a blend of promising new capabilities alongside intricate measurement complications.

Amidst this complexity, there's a notable shift in focus among brands and retailers. They're actively moving away from relying solely on conventional metrics like return on ad spend (ROAS) to embrace more concrete indicators of business success, such as acquiring new customers and enhancing customer lifetime value. This shift underscores the pressing need for a comprehensive strategy that can accurately measure the genuine effects of retail media investments across the highly varied and segmented technological ecosystems.

Echoing this sentiment coming out of Amazon Ads unboxed event last year, Chief Media Officer Jacob Snelson remarks, "The greed of retail media is that it is a fast dopamine hit of low spend to acquire a customer at a high conversion rate and ROAS. Rightfully so, as the consumers are searching to buy most likely in that moment. So as brands and advertisers we have been falsely led to believe to expect the same return from DSP to streaming TV.”

ROAS, by its nature, offers a narrow view focused on direct returns and fails to account for longer-term brand building and awareness benefits.

This statement encapsulates the industry's journey towards refining its approach to measurement, aiming for a deeper understanding of advertising's true value in the retail media landscape.

Our team's insights:

We asked our team: Many brands still tend to rely on media metrics like?reach and frequency?and?ROAS, while brand marketers focus on business outcomes such as?new to brand, share of voice?and?digital shelf analytics?as key performance indicators.?What do you suggest?

Connect your performance KPIs to what you are targeting. Overarching KPIs of reach or ROAS are doing a disservice to the dollars that were invested with other goals in mind. Look at reach for your most upper funnel activations, CTR or DPVR for your consideration tactics, and ROAS and SNSSR for your most conversion-focused advertising. To think of your advertising investment in tandem with long-term strategy, look at metrics like TROAS, Lifestyle Value metrics, and SOV over month-long look-back windows. That will be the most accurate picture of the impact of advertising.

- Anna Bever , VP of Retail Media

Regardless of where your Retail Media ads serve, they're still Retail Media ads and most brands fixate on bottom of funnel KPIs and metrics. I believe there's still a lot of unlearning to do in the way we think about Retail Media measurement. By fixating on bottom-of-funnel metrics, you sacrifice growth. By focusing on top-of-funnel metrics, you sacrifice efficiency. A sweet spot can exist. The key is tying brand building activations to reach, audience growth, and awareness focused KPIs. Inversely, ROAS/CVR/SnSS are suitable product marketing KPIs.

- Chase Arnold , Director of Retail Media

Ultimately, the future of retail media success lies in striking the right balance between short-term returns and long-term brand growth. While ROAS and other performance metrics will always play a vital role in gauging immediate outcomes, brands must look beyond these numbers to truly understand the broader impact of their advertising efforts. By adopting a more holistic approach that encompasses both performance and brand-building KPIs, companies can drive meaningful, sustainable growth. Brands who can adapt their measurement strategies to capture both direct conversions and lasting customer relationships will be the ones who thrive.