What’s My iROAS and Other Questions that Demand Answers, with Andrew Criezis, President at NIQ

Transcript

Our transcripts are generated by AI. Please excuse any typos and if you have any specific questions please email info@digitalshelfinstitute.org.

Peter Crosby (00:00):

Welcome to unpacking the digital shelf where we explore brand manufacturing in the digital age. Hey everyone. Peter Crosby here from the Digital Shelf Institute, getting clear answers to critical questions about your return on ad spend is, well, let's just call it a freaking nightmare. There are, as yet, no clear standards to compare retailer media, apples to apples, no easy path to roas, or even more importantly, incremental ROAS or iROAS. With the data being all over the place across retailers and the incentives, often at odds, the chain of trust on your media investments is broken, not irretrievably, but that's where we are now. Andrew Criezis, president at NIQ joined Lauren Livak Gilbert and me from the front lines of this battle for clear omnichannel ROI, and offers his best advice for how brands can organize and optimize for measurable omnichannel success. Andrew, welcome to the podcast. We're so delighted to have you here.

Andrew Criezis (01:08):

Thanks for having me, Peter. Very happy to be here.

Peter Crosby (01:11):

So you live in a world of data 24 7 for which I offer my condolences, but brands are constantly trying to assess what the right media mix model is for their business and what will drive the most ROI. But that is not an easy question to answer. There are so many data sources and brands getting different numbers from retailers versus what they're seeing inside. And I think it's the whole thing is sort of, I dunno, I'd love your perspective on this, but building kind of a lack of trust and not because anyone's trying to deceive anybody else, but it's just a mess of information. Too much, too little. That's great. And anyway, one, does all of that sort of make sense and what are some of the biggest challenges that you're seeing that brands are facing around ROI measurement these days?

Andrew Criezis (02:02):

Yeah, that's really great point, Peter, and I think you hit the nail on the head, right? It's created over the last couple of years a lack of trust in the industry. And so when we think about retail media, when we think about ROI measurement, I think it's pretty clear that there's no standardization. The industry is grappling with this. So from retailer to retailer, everyone has different methodologies when it comes to assessing retail media, when it comes to assessing their ROI investments and then also third party providers. So whether you're a bidding tool or different capabilities also have their own methodologies. And so what that's meant is that if I'm a brand, I really don't know who to go to to actually be a source of truth. And I also don't know the intricacies of some of the rules that are being applied in the methodologies.

(02:52):

And so that's absolutely led to lack of trust. And then as a result, you have all these different data sets. And so trying to bring that data together to have consistency across your portfolio, have consistency in an omnichannel view is almost impossible. Even the biggest CPT brands are struggling with this. And so I think there's two truths that have to come out. One is the ability to integrate data across multiple sources. So being able to connect data from multiple retailers, get down to the most granular level and also look at drivers. The second is start to have clarity. And I think this is just needed in the industry around simple things like how many weeks post-exposure are being used within ROI measurement like very basic components. And so getting to the KPIs and the raw data, understanding, having consistency and having a common taxonomy I think is really important. And then the third is just having independent parties. Obviously something where Nielsen IQ comes into play, but having someone who doesn't really have a bone within the arena, so no one who's necessarily profiting from the transaction of retail media necessarily, that can be kind of an arbiter in the industry. So I think those three things need to be successful. There are definitely challenges today. I hear it all the time from brands, whether it's small brands in the US or global international brands, everyone's struggling with this topic.

Peter Crosby (04:22):

I know there's been a lot of work being done at the IAB and partnerships trying to work on this standardization, and I'm wondering if you feel like this is inevitable that we will get to some level of standardization, which will be one of the kind of legs of your stool that I think you're talking about. Do you see hope there?

Andrew Criezis (04:44):

Yeah, no, it's a good point. Certainly the IB has come out with kind of broad retail media definition, lots of detail within their content, and I think it's gotten mixed feedback depending on the different parties.

(04:58):

And so certain retailers all for it and certain are very much not following that same guidelines or very much opposed, we are going to be coming out with some perspective from the Nielsen IQ side. We're also working with a few other third party entities and leveraging some of that content that we're going to announce in Q1 on really the marketplace definitions. And I think it just naturally has to drive some sort of consolidation in the way that we measure. And there's a lot of dollars being transacted here. There's a lack of consistency if we want brands and want to trust and also to invest more and to drive those value propositions back to their C-suite and retailers who want this high margin impact to their business, but also the direct attribution. We've got to have more consistency. So I think it is going to take some time. I think there are forcing functions, which is just the amount spend taking place and then the ID coming out. I think that's a great impetus for other players to help consolidate those measures.

Lauren Livak Gilbert (06:07):

And a big way for this to be successful is if the brands and the retailers both collaborate together to determine these things to align on these things to make sure they're on the same page. So do you have any examples of retailers working with brands on their ROI numbers and really trying to be clear about what does this mean? What are you showing me? What should I do with this data?

Andrew Criezis (06:28):

Yeah, so I think it's coming out more and more, obviously, I'll give example. Kroger is coming out with a much more focused methodology, but we've seen, I won't name the retailer specifically, but examples where as I was mentioning the drivers of ROI, or you want to say incremental roas. And again, depends on what is going, the denominator versus the numerator is what really delineates those two measurements. I think the drivers are really important because if you traditional retailers will share kind of their ROAS number back. So looking very specifically at an ad campaign, again, not broad ROI, which is usually typically a broader assessment of return, but specifically for roas more specifically with a campaign. And they'll typically attribute all the revenue sales that's taking place, but they're not necessarily doing more advanced analytical modeling to back out other drivers that we're not specifically the advertisement or the incremental consumer engagement.

(07:34):

So things like were there fluctuations in distribution? And so we did do analysis for a client this past year that looked at those key drivers. So distribution, were there out of stock impacts on shelf either for competitors or for yourself that had an impact on the sales during that exposure period. Are there impacts into ratings, right? Was there shift in ratings during that period? Was there other activity going on from a paid search that also drove either more sales or less sales during that campaign period? And so you really need to have an advanced model capability to then look at those drivers, back them out and then say, okay, this was the driver of that incremental purchase and it wouldn't have happened and it was truly differentiated. So I think we, we've kind of proven with some clients that what you're getting from a retailer today, some retailers not all oftentimes could be a multiple higher in what they're showing you is the return. And so we had one client say the return was saying 10, the number was more four or five x still a return, right? You're still getting a return and a lift, but it was nowhere near what the reality was of the situation. I think that's why the lack of trust historically hasn't been there. So specifically I know retailers are working on it, but again, there isn't consistency in how it's applied and it's also really hard for brands to understand which ones to rely on and therefore what the drivers are.

Lauren Livak Gilbert (09:07):

I feel like ROAS is kind of like V Mart and how Harry Potter, let's not say ROAS because everybody has this visceral reaction to it now because it's not super clear about what it means or where it comes from. But iROAS I've heard in a better light incremental roas. For those who are not familiar with that, can you talk a little bit about how you're seeing brands talk about iROAS and or calculate that with their retailers

Andrew Criezis (09:34):

And bred out of, and this is something that we at Nielsen IQ are really focused on given our digital shelf capabilities with data impact and also just really big depth and analytical modeling, but more and more players are trying to drive, what I was alluding to is just the incrementality. So what that means is you need to back out in your models and in the math, all the other variables that could be impacting or transact that sale. So would that sale if you never did the advertisement, would it have taken place is ultimately what you need to know? Or was it because of truly this unique ad? And so things like price, as I've mentioned out of stock assortment, distribution components have a huge impact. Other paid activities that are going on within the category or within competitors, there are just a huge host of variables that do impact ultimately the transaction.

(10:30):

And if you have all those variables in your model and you can control foot and look at the actual sale point of sale data and then back those in, then what's truly incremental or I oas. So I do think that's the right methodology. It requires significantly more analytics. It's not just taking total sales and saying, okay, total sales transacted over a certain period with certain rules. This is the expense of the ad and this is your roas. Incremental is going a step further with the analytical modeling and something that I think has, as I gave the example before, unearth Earth that there is incremental growth, which is great. There is a return, but it wasn't nearly what this brand as an example was getting from the retailer directly.

Lauren Livak Gilbert (11:14):

When you're working with brands on IROs, who in the organization at the brand are you working with, are working with the retail media team? Is the e-commerce team involved? Is it an analytics partner? Just for everyone listening to get a sense of if you don't have those people collaborating, who should they be collaborating with?

Andrew Criezis (11:33):

Yeah, really good question. It does vary. Typically think of it as size of brands, depending if they dedicate teams, but typically it's the media team or even some of the agency teams. So if you're working with an agency who's managing your media spend and managing your digital presence, the agencies are involved. And I've been on multiple conversations, even just the couple of days with agencies. If it's in-house, it's typically your media team, but also the, I'll give an example. It's an Amazon e-commerce manager. They're very focused on this. Amazon obviously has a lot of great tools to go deeper here. But then if you go deeper to the next couple retailers, if you have a dedicated e-commerce or digital team, you're starting to ask these questions, you're starting to ask, okay, well actually show me how you're calculating the ROAS or the iROAS and are you looking at broad spend or broad sales or how are you breaking this down? So I think those two, three personas are probably the most common that I'm talking to.

Peter Crosby (12:33):

Yeah, and I think so much of the, we've been talking about brands and retailers and part of our thesis is that because of the high margin nature of retail media, it's put brands somewhat more in the driver's seat than they used to be because they are the source of revenue for the balance sheet of retailers. And so it sounds like you agree that they have some of that clout now that they may not have had to sort of press for things with their retailer partners. But I'm wondering if, I would imagine the kind of data that they're getting you folks being an independent source who your dog in the hunt is to serve your clients well, I imagine, and earn more business for Nielsen to help them with this problem. So you want to do that, right? Is the kind of research that you're doing in this area available to a large proportion of brands or is this really for the top brands that are able to, they're spending X whatever, hundreds of millions of dollars, you know what I mean? Who is this for and who can have access to the answers from folks like you?

Andrew Criezis (13:52):

Yeah, so I think there's a number of players in the industry who are starting to, I would say bring this to life on the incrementality side of it, but NIQ specifically, we do work with brands of all sizes. So we have a large depth in our business, and I'll say, I'll pick say the US as an example, thousands of brands that work with in CPG of all sizes. So whether you're a small brand or a large brand when it comes to the amount of retail media spend, obviously it's a driver there of just how much resource do you really put on this? And then I think it shifts to are you leaning on an agency to manage all of this for you? And so then you're kind of as a brand challenging your agency and then challenging the retailer, is this effective or not? For the larger brands, you're typically either some agency or internally led, and you probably have a larger team focused on it.

(14:41):

But from an NIQ standpoint, one, we've got a great view into the retail media side through our digital shelf capability that accessible why price range is for all brands. And two, when it comes to incrementality, I think it's just really decision for you as a brand of how much are you spending today in retail media? How much do you expect to be spending in the future? How important is that for your presence? Which we know it has typically drives a significant amount of influence both in online traffic but also influencing in-store traffic, which is typically what you want to be doing both from an omnichannel standpoint. And so yes, we're happy to partner with you at least having a conversation about how we could support you and if not us, there's others that I think are beginning to pop up in the market.

Peter Crosby (15:25):

So with this increased level of power they might have with their retailers to have these tough conversations, but also the accountability that everyone's starting to feel in a time where money ain't cheap and you're expected to drive growth in a difficult environment, what are some of the top questions that you would advise your brands to be asking their retailers to try and get at some of these answers?

Andrew Criezis (15:52):

Yeah, it's definitely like a tug of war right now between the brand budgets, what retailers want. And so I think it's still an evolving industry. You guys know this firsthand, right? It's still such a young industry when it comes to the retail media networks. I would say one is just be very vocal and strong on what are you getting for this? Fundamentally, what are you getting from this investment that you're making in their retail media network? So not just the ROI, but more details on a shopper or consumer level challenge your retail partners on. I want to better understand the math, simplify this for me. How are you getting to your ROI or ROAS calculation? What numbers are going into the sales on the numerator versus the denominator? And just very basic terms, I think you can ask the retailers and if they're not willing to share, I think you can also challenge them and say, Hey, you should be looking up the IEB standards or some of the work that Nielsen iq, other partners that we work with like FMI are coming out with. These are some of the third party independent standards that are in the marketplace. I think it's time to start to challenge and make sure that we're trying to force the industry to say, let's have the right conversations, let's get to the right decision and transparency. So I would say push on how you're getting to the profile, the math, the very simple math, and then ultimately any data that they can show you around consumer impact.

Lauren Livak Gilbert (17:28):

I want to know if you agree with this, Andrew, but I think that the retailers are also looking to the brands to understand how do you want to think about measuring these things? What is the impact that you need to drive? How do you look at all of these metrics together? So I think a lot of the times the brands are asking those questions as they should, but also maybe come to the table with, Hey, let's collaborate on what this means for us collectively and how we should be moving this forward. And I feel like those conversations can happen in joint business planning or at other times, but I think that's also valuable as well.

Andrew Criezis (18:02):

And at the end of the day, to your point there, retailers want incremental growth as well, right? Absolutely. A win-win. So if we as an industry get this to be more successfully defined, aligned and consistent across retailers and across partners, absolutely. The game of retail is driving more incrementality into online and store. They are super focused on this. So yeah, I agree. I think it becomes a win-win.

Peter Crosby (18:31):

Do you see, and obviously no names required, but do you see any companies sort of turning the spigot a little lower instead of opening up the faucet? In other words, are they on the spend yes, on the spend just because they just don't know if it's getting the return? Are you seeing that?

Andrew Criezis (18:52):

Yeah, I think there's maybe two elements. One, companies that hadn't been spending as much or a little bit standoffish or just weren't as advanced in this space are beginning to spend a little bit more. And I think those are a little bit more further down the tail. The big CPG players in the US have been on this, and there was a big shift in budgets from a wallet standpoint, from trade into retail media over the last couple of years. And I do think there's a debate within brands about pulling some of that money back. If you can't truly prove the ROI that it was incremental, and therefore you're starting to see some retail media networks trying to come up with their IROs calculations and beginning to try to communicate that more clearly to brands say, Hey, actually don't pull away. Don't close the tap on us. Here's the value and here's this data that we can start to approve. But again, that is inconsistent from retail to retailer. So I am seeing and hearing some bigger brands closing down the taps a little bit there. And I think it's not that the dollars go away entirely from their budgets, it's more of shifting it back. Am I shifting it back to trader? Am I shifting back somewhere else that isn't just in the RN?

Lauren Livak Gilbert (20:12):

So when we're thinking about the more holistic omnichannel strategy and omnichannel data, how are you recommending that brands think about the broader data ecosystem and how all of that fits together to build out that more omnichannel data picture?

Andrew Criezis (20:29):

Yeah, no, great question. And this is something that we now you spent a ton of time on, is from an omnichannel. It's kind of like our center north star that we focus on. So for brands, I think there's a couple components. One on the digital side, it's clear through a ton of research and even specific work that we do with brands, the digital and online influence is pretty broad in its omnichannel. So as a brand A, are you going after an in-store strategy or are you exclusively online and digital? More and more brands are starting online digital first and then trying to break into in-store and go to pretty large in-store retailers, not just starting up through small retailers and kind of growing up the chain. So for brands that are starting that journey, it's one, make sure you have the right digital shelf visibility, that you've got the right view across your current landscape, and then two, that you have visibility into your competitive set in store.

(21:26):

So you need to know the omnichannel landscape because the online side is pretty different than the competition in store, right? The assortment is much more limited in store. And so as you're making that transition from online to in store and having the two, you need to have the underlying data to understand who your competitive set price positions impacts from promotional activity and just the dollars that are required to be successful in store as well as online. For the larger players that are already in this space, the biggest challenge and need that they have and that we support from NIQ standpoint is consistency in the data and aligning the data in store and online. So having your sales and share measurement solution for both point of sale EPS data, but also your digital causals, having that integrated at A UPC or item level, and I'll give Amazon as the example, having Amazon sales and share data at A UPC and key account level side by side with say like Walmart. You've got to have those side by side in the same language and taxonomy. And that's something we're happy to provide and support in the market.

Lauren Livak Gilbert (22:30):

I think that UPC level data is actually really interesting. So if I put my brand head on for a second, when I was looking at our data and working with our analytics team who had the broader data ecosystem, they could only get down to the category level. And that's challenging from an e-commerce perspective because you really need to understand at that UPC level so you can actually make changes. So I point that out because if a brand is listening and they have an analytics team, that analytics team might be focusing on a category level, but if you can have a conversation to figure out, could you work with an N IQ or someone else or have a conversation about getting at a UPC level so you can understand what changes can I make to actually impact my assortment? I don't know if you've come across that at all, Andrew, but I know that's a shift in thinking for the broader analytics team who I think most of the time thinks in more of a category level.

Andrew Criezis (23:24):

Yeah, no, I think that's right. Typically, a lot of models are done at a higher level, and so you're kind of giving broader recommendations across various channels, online activity, digital activity, in-store activity. But when you can directly attribute it to UPCs and you have consistency across channel in an omni way, whether you're doing something, trying to engage a specific product up top of funnel or down bottom of funnel, getting to UPC, the right attribution, having an understanding of your set and competitive set, it just allows brands to drive action they haven't done before, which is really cool. And it's something that we talk about more and more of this idea of an omni shelf, right? It's kind of like this evolution of digital shelf is just front and center for so many of our clients and has been growing and evolving the last five to 10 years, but now it's this need of having a deeper Omnis shelf, but it's got to be UPC level visibility of both in-store and online. And if you can bring those two and marry those two together, then you have really a total view and you can start to operate in a way as a marketer or as an e-commerce leader differently than you have before.

Peter Crosby (24:36):

And Ruby, you must have, I would imagine a ton of conversation around this data with the C-suite at your customers. And I'd love your perspective on how they're clear on the omnichannel opportunity, but I've sort of been feeling lately that below that level sort of old silos that were in some ways bust apart during Covid because there was no choice are getting built back up again and people want their money back. And I'm wondering, it sounds like you're agreeing with some of this, and I would love your perspective on c-suite, how the C-suite thinks about omnichannel and digital's place and influence in that. And then are they trying to use that understanding in your data to reeducate the organization or educate the organization about what it truly means to be omnichannel or commerce or whatever the heck you want to call it?

Andrew Criezis (25:46):

Yeah, I would say directly sure answer is yes, and you'll see it and you'll hear it in the earnings calls. So I'll talk maybe more like public companies and talk non-public, but that's an easy way for you to see directly like the conversations CEOs and C-suite are having to have on these topics. And omnichannel is front and center, and it's for two reasons, I would say. One is the reality of the consumer being 80% plus, and it'll pick us omnichannel shopping dynamics. So whether or not your teams within your company are properly structured from an omnichannel reality is your consumers are, they don't care how you're structured, what they're buying, you're buying an omnichannel, and that's a fact. And media then overlaps in a pretty complex way across those various channels. So I think for CEOs, it's front and center from a consumer standpoint, it's also how they're being judged and it's how they're being measured.

(26:41):

So when it comes to market share, that omnichannel data has come together entirely. And as N iq, we work very closely, almost exclusively with a lot of the largest banks and investment firms. And so they're using that data to say, Hey, dear, CEO, this is your market share. This is your shift, this is your competitive set. What's changing? Why? And they're looking at that omni view, and they're looking at Amazon, they're looking at Walmart, they're looking at all the different retailers and then assessing the performance of your company. So I think from a c-suite down Omnichannels front and center, and I do think you're right, COVID created this fantastic dynamic where it was all hands on deck as a company, how do we keep this machine going, but also evolve it from a digital standpoint very quickly? And that meant budgets. Budgets flowed kind of aggressively one direction towards the digital shelf, towards retail media.

(27:39):

Now it's a little bit of like, yeah, but you don't quite have, going back to the very first comment you made, which was Peter around trust, don't necessarily have the trust or necessarily the right validation of the ROI there. I think I'm more effective as shoppers have returned back to in-store as well to do some other activities or activations. So I agree with you. I think there's a little bit of a battle underway in a lot of large CPGs around budget, around who controls what and where that is going to ultimately reside. I don't think there's a consensus from the conversation I've had on exactly where those budgets are going to shift or sit and who ultimately has accountability, but between marketing and sales, there's large dynamics underway.

Peter Crosby (28:26):

Well, Andrew, on that note of the battle of the budgets and where things are going to go, it just seems like you folks and so many others are really doing yeoman's, yo people's, yo person's work to drive towards these standards that are just going to make everyone's lives easier and that it just takes time. And so I thank you so much for coming and sharing the thought process that our listeners should have at least to start to hold themselves and their retail partners accountable and think about how they work with other folks in their organization to drive towards that omnichannel question that their c-suite is going to be asking them. And they should really try to make sure that as a combined unit, they have an answer for it. So I'm really grateful for you sharing these insights and analytics with us. It's really helpful.

Andrew Criezis (29:31):

Well, thank you Peter. Very happy to be here and happy to chat again.

Peter Crosby (29:35):

Thanks again to Andrew for joining us. This is a topic that we will continue to be exploring at the DSI, so be sure to hop on over to digital shelf institute.org and become a member. It's free. So your ROI will be limitless. Thanks for being part of our community.