New Incrementality Estimation Module standardizes media ROI across retailers through iROAS metric and optimizes for incremental sales growth
CommerceIQ, the leading retail ecommerce management (“REM”) platform, announced the launch of its Incrementality Estimation Module, a new solution that estimates true ROI of retail media investment through the Incremental Return on Ad Spend (“iROAS”) metric. The new solution helps brands to effectively allocate retail media investment across retailers and optimize them in real time for incremental sales.
Brands spending retail media dollars face several major challenges in measuring and optimizing the impact of their advertising spend on total sales. For example:
- How to prove the true “incremental” impact of retail media formats, without double-counting or underestimating organic sales.
- How to standardize performance KPIs and attribution across different retailers and ad networks, for easy comparison and reporting.
- How to estimate and optimize for incrementality in real time, rather than relying on outdated or incomplete ROAS metrics or a once-in-a-year media mix model.
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Historically, tool providers and agencies have used various proxies to measure and optimize retail media performance, such as ROAS on category keywords, total advertising cost of sale (TACoS), or new-to-brand sales. However, these proxies are either inaccurate or incomplete, as they do not account for the organic sales that would have occurred without advertising. For example, a customer who is “new to brand” might have found the brand’s product organically, even in the absence of ads, because of the high discoverability of the ecommerce platforms. They also do not capture the dynamic and complex factors that influence shopper behavior and purchase decisions. Brands then revert to optimizing for ROAS and leaving money on the table. Practitioners fail to justify the ROI of retail media investment and face budget cuts.
CommerceIQ’s AI-based Incrementality Estimation Module solves these challenges by incorporating dynamic share of voice and search rankings, shopper propensity to buy and relevancy of searches to truly estimate net new sales that a brand would not have gotten without advertising. Benefits of CommerceIQ’s Incrementality Estimation Module include:
- For the first time, brands can understand the true incremental ROI of their retail media investment.
- A standardized metric to measure media performance across retailers/ad networks that is independent of attribution.
- Data-driven media planning based on incrementality of investment across retailers, ad types, SKUs and keywords, and optimization for incremental sales in real time.
“With iROAS, brands can now maximize their media investments by delivering more total sales with the same media budget, or flat sales with lower media spending,” said Guru Hariharan, CEO, CommerceIQ. “It’s a powerful tool in the CommerceIQ arsenal that enables comprehensive and proactive media planning and moves the brands from media mix planning to media mix automation.”
The Incrementality Estimation Module is designed for ecommerce sales, marketing and agency teams and comes bundled with CommerceIQ’s Retail Media Management (RMM) Platform. Brands that do not currently subscribe to the RMM platform can also access the Incrementality Estimation Module as an independent solution for measurement, reporting and planning purposes.