Trying to understand retail media fundamentals? You can with our well-rounded and easy-to-digest retail media glossary. See all the retail media terms to know to feel empowered, not perplexed, about the retail advertising world.
The Retail Media Terms To Know
Advertiser Data Matching
Matches advertiser and retailer data sets to target specific consumer groups. (Data can include demographics, purchase history and behavioral patterns, enabling advertisers to deliver more personalized and relevant ads.)
Relationship between items frequently purchased together by a customer. Refers to customers’ tendency to buy certain items together, indicating these items are complementary or they meet a shared need or desire. Retailers use this info to optimize their product placement and merchandising strategies and create cross-selling opportunities.
Break-Even Advertising Cost of Sale (BACoS)
Metric measuring the minimum efficiency required for an advertising campaign to break even on Amazon. It’s calculated by dividing the total cost of goods sold by the total revenue generated from advertising. BACoS helps sellers and advertisers determine the minimum level of advertising efficiency they need to achieve to make a profit. If the actual Advertising Cost of Sale (ACoS) is higher than the BACoS, the campaign is not profitable; if it’s lower than the BACoS, the campaign is profitable. BACoS helps Amazon sellers and advertisers set realistic targets and optimize their advertising campaigns for maximum profitability.
Links ad exposures to transaction data. Tracks customers’ interaction with ads and whether those interactions resulted in actual purchases. Advertisers can see exactly how their advertising dollars are being spent and how effective their ad campaigns are.
Advertising creative featuring two or more brands collaborating on a single message or promotional offer. This typically involves a partnership between a retailer and a manufacturer or a complementary product supplier.
For instance, a retailer may team up with a manufacturer to create a co-branded ad promoting a special discount on a bundle of products that are both sold by the retailer and produced by the manufacturer. By leveraging both brands’ strengths and customer bases, co-brand ad creatives can help increase brand awareness, drive sales, improve customer loyalty and offer a cost-effective way for businesses to reach new audiences and expand their market share. When creating co-brand ad creatives, brands should align their messaging, tone and visual identity to create a cohesive and effective campaign.
Competitor Category Share (CCS)
Metric measuring the percentage of sales within a specific product category that’s accounted for by a particular competitor. CCS is calculated by dividing the total sales of a competitor within a category by the total sales of all competitors within that same category. It provides insights into market share and competitive positioning within a particular category, allowing businesses to track their performance against rivals.
By analyzing CCS, businesses can identify areas where they may be losing market share to competitors as well as opportunities to capture more market share within a given category, evaluate the effectiveness of their marketing and advertising efforts and make data-driven decisions about where to allocate resources to improve their competitive position.
Type of online advertising that displays ads based on the user’s browsing behavior and interests. (In other words, it shows ads relevant to the user’s current web activity, making the advertising experience more personalized and targeted.)
Cost of Sales (COS)
This is a retail media metric that calculates the costs associated with selling products on an online retail platform, including advertising costs. You calculate it by adding up all the costs of selling a product (such as production, shipping, storage and advertising fees). Then, divide that by the total revenue you generate from sales.
In retail media, COS can determine the profitability of selling products on an ecommerce site after considering all the costs. By analyzing COS, retailers and brands can optimize their pricing strategies, evaluate their advertising campaign effectiveness and identify areas to reduce costs and improve profitability. COS also can help you set realistic revenue and profit goals as well as make data-driven decisions about how to allocate resources.
Cost Per Order (CPO)
Metric that measures the cost an advertiser incurs for each successful order they generate from an advertising campaign on an ecommerce platform.
To calculate it, you divide the variable marketing cost over a defined time by the total orders during the same period. CPO gives advertisers an idea of their advertising campaigns’ cost efficiency and profitability. By effectively managing CPO, advertisers can optimize their ad spend and improve ROI. Lowering CPO typically involves optimizing ad targeting and bidding strategies, improving the relevance and quality of ad creative and identifying and eliminating inefficiencies in the sales funnel.
The entire process a potential customer goes through before making a purchase. Customer journey includes everything from awareness and initial research to consideration to product or service purchase.
Customer Lifetime Value (CLV)
CLV measures the total amount of revenue, profit or value a business can expect to generate from a single customer over the entire duration of their relationship.
CLV considers factors like:
- Frequency and value of customers’ purchases.
- Length of time they remain customers.
- Costs to acquire and retain customers.
CLV helps businesses determine the maximum amount they should spend on customer acquisition and retention efforts such as marketing and loyalty programs. By accurately estimating CLV, businesses can optimize their marketing strategies to attract high-value customers and retain them for longer, leading to increased revenue and profitability over time. Additionally, CLV can help businesses identify areas where they can improve customer satisfaction, engagement and loyalty, ultimately resulting in better long-term customer relationships.
Protects sensitive information by masking personal identifiers from data sets. Involves removing, modifying or replacing any info that could be used to identify an individual, which could include name, age, social security number and other demographic information. Reduces data breach risks and unauthorized private info access.
Digital Out of Home (DOOH)
Includes digital billboards, signage and even public transportation advertising. Advertisers can tailor messages to specific audiences and even adapt their ads based on weather, time of day or other external factors. They also can change content frequently and remotely.
Ecommerce is the process of buying and selling goods or services online. The entire transaction happens over the internet, from browsing to payment to delivery. Customers browse through virtual storefronts and place their orders online.
Brands that sell directly through a retailer and offer products or services to a retailer’s customers and their specific needs.
First-Party Shopper Data
Info retailers collect directly from their own customers through various methods such as customer registration, loyalty programs and purchase tracking.
Data includes factors such as shopping habits, preferences, demographics, purchase history and more.
Aims to guide customers through every stage of the buying process, from initial awareness to final purchase. Starts with capturing consumer attention and raising brand awareness, shifts toward building interest and engagement and finally drives conversions and purchases through retargeting and special offers.
Refers to the positive impact one marketing message or brand association has on the perception of another unrelated message or association. The term comes from from the halo effect, where the positive qualities of one thing shine on another.
For example, an effective advertising campaign for one product or service can improve the perception of other products or services. By leveraging this, advertisers can improve their campaign effectiveness and overall brand value.
Incremental Return on Ad Spend (iROAS)
Metric that measures the financial return on a particular advertising campaign or channel, taking into account the costs associated with running that campaign or channel. It’s calculated by dividing the total revenue generated by the campaign or channel by the total cost of the campaign or channel. iROAS is typically expressed as a percentage, with higher percentages indicating a more effective advertising campaign.
Broader concept that refers to the additional value or revenue generated by an advertising campaign or channel compared to the revenue that would have been generated anyway without that campaign or channel. In other words, it measures the impact of a particular advertising effort on overall sales or revenue. It’s often evaluated through experimentation to compare the performance of a group exposed to an ad campaign against a group that wasn’t exposed to the campaign.
Mixed Media Modeling
Helps advertisers determine the most effective advertising strategy for promoting their products or services. Analyzing the impact of different advertising channels can provide insights into which channels are driving sales, and which aren’t.
Type of advertising that blends in with a particular platform’s or website’s content and environment. Designed to look and feel seamless and be non-disruptive to the user experience.
New to Brand
Retail media advertising metric referring to the percentage of customers who purchased a product on an online retail platform through an ad that had not purchased any products from that brand in the past 12 months.
It’s a measure of advertising effectiveness in acquiring new customers for a brand. Amazon and other online retailers collect and provide New to Brand data as part of their retail media advertising services. New to Brand can help brands and retailers understand their advertising’s impact on reaching new audiences and driving brand growth.
Brands that don’t sell directly through a retailer but instead offer related products or services relevant or complementary to a retailer’s customers and their specific needs.
Data points advertisers collect from offline sources to inform their online advertising campaigns. Signals can come from a variety of sources, such as in-store purchases, loyalty program data and even TV ad exposure. (For example, a retailer may collect data on which products a customer purchases in-store and then use this info to target that customer with ads for similar products when they’re browsing online.)
Data points advertisers collect from online sources to inform their online advertising campaigns. Ranges from search intent data, which is info gathered from a user’s search queries, browsing behavior, social media activity and email engagement.
Pay Per Redemption (PPR)
Online advertising pricing model where the advertiser pays a fee for each successful promotional offer redemption such as coupons, discounts or rebates offered on an online retail platform.
When a customer redeems the offer and makes a purchase, the advertiser pays a predetermined fee to the retailer. This can help drive brand sales and engagement as the brand only pays for successful redemptions rather than for impressions or clicks alone. By optimizing PPR campaigns, advertisers can focus on driving more sales while keeping their marketing costs under control.
Comprehensive list or database of all products offered for sale by a business, typically organized by category or product type. A catalog includes product descriptions, features, specifications, pricing, availability and product images or illustrations, customer reviews and ratings. It’s a key tool for businesses to showcase their products to potential customers, allowing them to browse and compare different options in one place. It’s also essential for managing inventory and tracking sales as well as providing accurate and up-to-date product information to sales teams and distributors.
Product Description Page (PDP)
Webpage showing detailed information about a specific product offered for sale on an ecommerce platform or online retailer. A PDP typically includes product images, features, specifications, pricing and availability, customer reviews and ratings and so on to help consumers make informed purchase decisions.
With an engaging PDP, businesses can improve their online conversion rates, reduce product return rates and enhance customer satisfaction and loyalty. A PDP also can be optimized for search engines to improve visibility and attract more organic traffic to an ecommerce site or online store.
Product Listing Ads (PLAs)
Online advertising that allows businesses to display their products on search engines and other digital platforms like Google Shopping. These ads typically show up at the top of a search results page. They’re relevant to a user’s search terms and typically include a product image, title, brief description and price.
Retail Media Network (RMN)
Type of advertising platform that allows brands to advertise their products and services to potential customers through various ecommerce websites, mobile apps and in-store displays. Advertisers can leverage consumer data collected by these retailers to show relevant ads to shoppers based on their browsing and purchasing habits. Brands can target their ads more effectively and reach customers who are most likely to be interested in their products. Retailers get an additional revenue stream from selling ad space on their platforms.
Return on Ad Spending (ROAS)
Measures the revenue generated from an ad campaign compared to the cost of running it. Calculates how much revenue a business earns for every dollar spent on advertising.
Sales revenue percentage increase that can be attributed to a specific marketing campaign or sales initiative. Measures the impact a particular strategy has had on driving sales and improving business performance.
Advertising formats designed to target shoppers while they’re actively looking to make a purchase, making them highly effective at driving sales. Shopper ad examples include product listings ads (PLAs) or display ads on retailer websites, which feature images, videos and other engaging content to capture shoppers’ attention and encourage them to make a purchase.
Stock Keeping Units (SKUs)
Unique identifiers, typically containing a combination of letters, numbers and symbols, for a specific product in a company’s inventory. Used to track items and manage inventory levels, making it easier for retailers to manage and monitor stock. Helps retailers make informed decisions about inventory replenishment, marketing and pricing strategies.
Total Advertising Cost of Sale (TACoS)
Metric measuring Amazon advertising campaign efficiency, and it’s calculated by dividing the total ad spend by the total sales generated from ads. TACoS helps sellers and advertisers determine the profitability of their advertising efforts as it shows how much of their advertising spend is going toward generating sales. A lower TACoS indicates a more efficient campaign as it means less money is being spent on advertising for each sale generated. TACoS helps Amazon sellers and advertisers optimize their advertising campaigns and improve overall profitability.
A form of payment that can be tracked and traced in real time back to a user online.
Velocity is how quickly a product sells in a specific store, usually measured in units sold per store per week. To increase sales, it’s crucial to ensure your product is distributed in the right locations, stores, displays and assortments.
What To Do Next
Advertising on retail media networks can be daunting, but once you’re familiar with the terminology, it’s much less so. For an added confidence boost, see this retail media strategy guide that includes actionable expert advice you can use now. Or explore all our available retail media resources to boost your brain and increase your retail smarts.
Juli Pettijohn is an experienced advertising professional who’s worn a number of hats in the advertising world from editor to writer to project manager. In her current role at Goodway Group, Juli works with internal and external teams to produce compelling case studies, webpages, proposals, press releases, presentations, award submissions, blog posts and other content that help educate readers about ad tech topics, amplify our brand and showcase client successes. She has written extensively about different topics including retail media, intent data and ways to prepare for our cookieless future.