Unlocking Incrementality: Key Insights from the IAB’s Retail Media Measurement Report

Digital ad channels like search, social, and programmatic display go through a predictable maturation cycle. Early adopters experience significant returns, which sparks broader industry interest and adoption. As the channels mature, new campaign tools and ecosystem technologies emerge to help manage and optimize results. This ushers in the critical need for accurate measurement for brands aiming to make data-driven decisions in increasingly competitive environments.

Retail media, the fastest-growing sector in advertising, has reached this critical point. With saturated auctions and heightened competition, precise measurement has become indispensable for brands seeking to understand and optimize their impact.

Incrementality has become the consensus approach for measuring retail media effectiveness, but brands still face several obstacles in implementing it successfully. According to Skai’s 2024 State of Retail Media report, common challenges include data integration issues, lack of standardization, and limited access to reliable measurement tools. These hurdles underscore the need for refined frameworks and collaborative practices that support accurate and actionable measurement.

Here, we review a new incrementality report from the Interactive Advertising Bureau (IAB), highlighting its key findings and insights. This report sheds light on the industry’s evolving measurement needs and underscores the challenges marketers face in accurately capturing incrementality in retail media.

Key Takeaways from the IAB Report

The need for clear, standardized measurement frameworks has grown as retail media expands. Skai’s State of Retail Media survey revealed that only 8% of marketers rate themselves as “extremely good” at measuring incrementality. The IAB’s new report, Retail Media Advanced Measurement & Data Collaboration, directly addresses this gap, outlining best practices and frameworks for tackling core challenges like incrementality measurement, data integration, and collaboration. The Skai team contributed to this report as part of a working group within IAB’s retail media network committee.

Here are some of the report’s main insights, guiding marketers aiming to enhance measurement precision and optimize for real incremental value:

• Incrementality is essential. As the report finds, incrementality measurement is vital for capturing the true impact of ad spend within retail’s closed-loop systems, helping brands distinguish between ad-attributed and organic growth.
• Data integration remains challenging. Fragmented data within “walled gardens” complicates measurement and cross-channel attribution. The report emphasizes the importance of advanced modeling in creating a more cohesive view across platforms.
• Diverse measurement techniques are needed. The report highlights methods such as Random Controlled Trials (RCTs), Match-Market Testing, Counterfactual Models, Media Mix Modeling (MMM), and Shadow-Mode Testing, providing various approaches to measure impact more accurately.
• Data clean rooms support privacy and accuracy. As the report discusses, privacy-compliant data clean rooms are crucial in enhancing data accuracy while enabling secure, collaborative analysis among brands, retailers, and partners.
• Optimizing strategies with incrementality models. According to the report, incrementality models help separate ad-attributable sales from organic growth, guiding more effective budget allocation and driving genuine incremental growth.

Skai’s Expert Reaction

As retail media expands, accurate measurement has become crucial, especially in retail media’s “closed-loop” environments where achieving incrementality is challenging. According to Skai’s 2024 State of Retail Media report, 56% of advertisers view performance measurement as central to budget allocation. However, over half (51%) struggle with issues such as data accuracy and integration—issues that the IAB also highlights as industry-wide challenges.

Kevin Weiss, Skai VP of Retail Media, captures the complexity of incrementality measurement, stating, “Incrementality isn’t a one-size-fits-all solution. Brands can’t rely solely on traditional methods as these approaches have become more complex and harder to action.” The IAB report echoes this sentiment, suggesting that transparent and adaptable models are essential for brands to accurately distinguish ad-attributable growth from organic sales. 

The IAB’s multi-concept approach to incrementality aligns with the industry’s shift towards a broader set of metrics, including incremental new-to-brand sales and customer lifetime value. Kenzie Oster, Skai Product Manager, observes, “In a highly fragmented and ambiguous world of retail media, it is refreshing for IAB to adopt a multi-concept approach to incrementality. Collaborating across brands, publishers, and tech providers—I think it is powerful to see that there is no one-size-fits-all solution. The magic comes from finding harmony across your measurement solutions to give you as much of the full picture as possible.”

This adaptability enables marketers to address various campaign goals, moving beyond single metrics and short-term results. In an environment where marketers are under constant pressure to prove their impact, incrementality is becoming indispensable. 

Melissa Barringer, Skai Senior Manager of Product Marketing, emphasizes: “As marketers feel the pressure to prove their impact, understanding the importance of incrementality and having a way to accurately measure it is critical to effectively scaling advertising. This new IAB report explores the intricacies of this topic, highlighting that valuable insights can be captured not just from a singular approach but from truly knowing your success metrics and having a multi-faceted approach to understanding the bigger picture.” 

Skai’s Approach to Incrementality in Retail Media

Skai has been developing ad technology solutions for over 20 years, starting with paid search, expanding into social advertising, and now focusing on retail media. Along the way, we’ve gained deep insights into marketing measurement and what marketers truly need to succeed. Through this journey, we’ve fine-tuned our approach to ensure that advertisers can not only gauge the immediate impact of their spend but also understand the broader, long-term value.

Our incrementality solution emphasizes three key principles that address the core needs of modern retail media marketers:

• Remove the Black-Box: We prioritize transparency by helping marketers understand the weights applied to measurements, making it easier to optimize their inputs effectively.
• Customize Your Metric: Skai enables marketers to define how incrementality is measured, allowing adjustments based on preferred dimensions, categories, and validation metrics that align with specific campaign goals.
• Closer to Customer Intent: By offering keyword-level iROAS insights, Skai provides deeper visibility into customer behavior, giving brands the tools to activate and optimize based on customer intent.

What we’re seeing right now is that retail media incrementality solutions are gaining traction, with a primary focus on iROAS as the foundational metric. While iROAS is a strong starting point, capturing the direct impact of ad spend, it only scratches the surface. At Skai, we recognize that to fully understand the impact of retail media, marketers need a layered approach. By combining iROAS with additional indicators—such as customer lifetime value, brand lift, and new-to-brand metrics—our ensemble solution provides a 360-degree view of campaign performance. This comprehensive approach empowers marketers to make data-driven decisions that maximize both immediate impact and long-term growth in a highly competitive retail media environment​

The Path to Accurate Incrementality Measurement

As retail media continues its meteoric growth, it is becoming increasingly crucial for marketers to commit to implementing the insights from the report as essential guidance for navigating the complexities of incrementality in retail media. By aligning with the IAB’s recommendations for standardized measurement frameworks, brands can enhance their ability to accurately capture the true impact of their advertising efforts. This commitment not only facilitates more effective budget allocations but also strengthens overall business outcomes, ensuring that marketers can make data-driven decisions in an increasingly competitive landscape.

Furthermore, the report emphasizes the importance of collaboration among brands, publishers, and technology providers to overcome measurement challenges. By fostering partnerships and engaging in data-sharing practices, industry stakeholders can adhere to the collaborative spirit outlined in the report. This collective effort will enhance the accuracy of incrementality measurement and contribute to a more robust retail media ecosystem. 

As we move forward, embracing these insights and collaborating will empower marketers to drive genuine incremental growth and position themselves as leaders in the evolving retail media space.