Executive Overview
Retail media networks (RMNs) have rapidly evolved from digital ad-space novelties into the crown jewels of omnichannel marketing. Among the heavyweights, Target’s retail media arm, Roundel, has consistently positioned itself at the vanguard of innovation, transparency, and advanced measurement. However, a significant chasm remains between the sophisticated metrics media owners champion and the practical realities brand marketers face on the ground.
During an exclusive industry event in New York City, Shawn McGahee, Senior Director of Performance and Insights for Roundel, revealed a striking reality of the current retail media landscape: despite years of concerted evangelism by Target and its peers, a mere 8% of Roundel’s advertisers currently utilize incrementality measurement as the primary Key Performance Indicator (KPI) for their businesses.
This disclosure exposes a profound tension within the trillion-dollar advertising ecosystem. Incrementality—the holy grail of performance marketing designed to isolate true campaign-driven revenue from organic sales via rigorous test-and-control methodologies—is universally praised by data scientists and platform executives. Yet, it continues to be sidelined by brand executives, finance teams, and traditional media planners.
This article investigates the "incrementality paradox." We examine why advertisers remain reluctant to fully trust or adopt a metric that promises the truest reflection of return on ad spend (ROAS), the operational hurdles slowing industry-wide adoption, and what this low adoption rate means for the future of retail media networks as they mature into indispensable components of the modern marketing mix.
Detailed Chronology: The Rise of Retail Media and the Push for True Measurement
To understand the current state of incrementality adoption, one must first trace the evolutionary trajectory of retail media networks over the past decade.
Phase 1: The Era of "Closed-Loop" Attribution (2015–2019)
When retailers first began transforming their websites and point-of-sale data into advertising inventory, the primary selling point was "closed-loop attribution." For decades, brand manufacturers ran television, print, and early digital campaigns with a persistent blind spot: they could measure impressions and clicks, but connecting those top-of-funnel metrics directly to an in-store or online purchase at a specific retailer was nearly impossible.
Retail media changed the game. By tying ad exposure on a retailer’s site to loyalty card data and transactional histories, platforms like Target could definitively state, "Consumer X saw your ad for laundry detergent on our website and purchased that exact detergent three days later at our store."
While revolutionary at the time, closed-loop attribution was inherently flawed. It credited the retailer’s ad for 100% of the sale, even if the consumer was already a loyal buyer of that brand, had already placed the item in their physical shopping cart, or would have made the purchase regardless of seeing the digital ad.
Phase 2: The Shift Toward True Value (2020–2022)
As brands poured billions of dollars into RMNs—seeking refuge in first-party data as privacy regulations decimated third-party cookies—marketing executives grew more sophisticated. They began asking tougher questions about budget efficiency. Simply knowing that an ad was followed by a purchase was no longer enough; brands wanted to know if the ad caused the purchase.
This realization thrust "incrementality" into the industry spotlight. Retailers, including Target, began building complex testing frameworks. These frameworks split audience cohorts into "test" groups (who saw the ads) and "control" groups (who did not), measuring the delta in sales between the two to calculate true incremental lift.
Phase 3: The New York Disclosure and Industry Realignment (Present Day)
The push for incrementality reached a symbolic milestone during Roundel’s recent advertiser gathering in New York City. While executives like Shawn McGahee expressed absolute confidence in Target’s proprietary measurement infrastructure, the accompanying revelation—that only 8% of advertisers rely on incrementality as their North Star metric—shocked many attendees.
This data point marks a critical inflection point. It signals that while retailers have successfully built the engine for advanced measurement, the market is experiencing severe friction in learning how to drive it.
Supporting Context & Metrics: Decoding the Incrementality Dilemma
To fully comprehend why only 8% of advertisers have made incrementality their primary metric, we must analyze the mechanics of the metric itself, juxtaposed against the institutional pressures facing modern brand marketers.
What is Incrementality, and Why Does It Matter?
In the simplest terms, incrementality measures additionality. If a brand spends $100,000 on a Roundel campaign and generates $500,000 in tracked sales, a traditional closed-loop attribution model reports a 5x Return on Ad Spend (ROAS).
However, incrementality asks a harder question: How many of those sales would have happened anyway?
Through sophisticated test-and-control methodologies, data scientists isolate the control group (unexposed shoppers) and compare their purchasing behavior against the test group (exposed shoppers). If the control group naturally bought $300,000 worth of the product without seeing the ad, the true incremental revenue generated by the campaign is only $200,000, reducing the actual ROAS to 2x.
For CFOs and brand stewards, incrementality prevents wasted ad spend on inframarginal consumers—shoppers who were already going to buy the product. In theory, every brand should demand this level of fiscal transparency.
The Barriers to Adoption: Why the 8% Number Persists
If incrementality is superior, why are 92% of Roundel’s advertisers looking elsewhere? Industry experts point to several systemic obstacles:
- The Fear of Depressed Numbers: Incrementality almost always reports lower top-line revenue figures than traditional last-touch or multi-touch attribution models. Brand managers whose bonuses and key performance indicators are tied to high reported ROAS numbers are often hesitant to adopt a metric that makes their performance look worse on paper, even if it is more accurate.
- Methodological Complexity and Standardization: Unlike a standard click-through rate (CTR) or cost-per-acquisition (CPA), incrementality requires sophisticated data science resources. Designing clean test-and-control groups, accounting for external variables (seasonality, macroeconomic shifts, competitor promotions), and interpreting the results requires specialized expertise that many mid-market brands simply do not possess in-house.
- Budget and Inventory Constraints: Running true incrementality tests often requires holding out a portion of the target audience from seeing ads (the control group). For smaller campaigns or niche product launches, holding back inventory can feel counterproductive to marketers trying to maximize reach and awareness.
- Organizational Silos: In many legacy consumer packaged goods (CPG) companies, the digital marketing team, the trade marketing team, and the finance department operate in silos. Bridging these departments around a unified, sophisticated metric like incrementality requires extensive organizational change management.
Official Statements and Industry Insights
The dialogue surrounding Roundel’s revelation highlights a broader philosophical debate within the retail media ecosystem. Industry leaders are caught between pushing for radical transparency and meeting advertisers where they currently operate.
During his presentation in New York, Shawn McGahee addressed the elephant in the room with measured optimism. While acknowledging that adoption sits at a modest 8%, McGahee emphasized that Target’s confidence in its measurement framework remains unshaken.
"We are entirely confident in our approach to measuring incrementality," McGahee stated during the event. "The infrastructure is robust, the data streams are clean, and the insights are actionable. However, we also recognize that the industry is on a journey. Advertisers are not yet fully ready to rely on it as their sole north star, and that transitional friction is something we are actively working through together."
Independent analysts view McGahee’s comments as a pragmatic acknowledgment of market realities.
“Retail media is maturing faster than corporate governance structures can adapt,” notes Sarah Jenkins, principal retail media analyst at Digiday Insights. “Retailers like Target have built Ferrari-level measurement engines, but many brands are still driving with a learner’s permit. You cannot expect legacy marketing organizations to flip a switch overnight from vanity metrics to advanced causal attribution without experiencing growing pains.”
Other industry stakeholders point out that while 8% sounds low, it represents a massive year-over-year leap from where incrementality adoption stood just two or three years ago, when the metric was largely confined to academic discussions and experimental budgets.
Future Outlook: The Path Forward for Retail Media Measurement
As the retail media landscape enters its next phase of hyper-growth, the gap between what is measurable and what is measured must eventually close. What will it take to move that 8% adoption rate closer to a majority?
1. Education and Standardization Across Networks
Retail media networks cannot operate in silos. If Target, Walmart, Amazon, and Kroger each utilize radically different proprietary definitions and methodologies for incrementality, advertisers will experience "metric fatigue." The path forward requires industry-wide standardization—led by organizations like the Interactive Advertising Bureau (IAB) and the Digital Advertising Alliance (DAA)—to create universal benchmarks for causal attribution.
2. The Evolution of Agency and Tooling Partnerships
As programmatic and retail media tools become more sophisticated, third-party measurement partners (such as Measured, Haus, and LiftLab) are stepping in to automate the heavy lifting of incrementality testing. By abstracting the complex data science into user-friendly dashboards, these platforms are lowering the barrier to entry for brands lacking massive internal data teams.
3. A Cultural Shift in CPG Boardrooms
Ultimately, the transition to incrementality is as much a cultural challenge as it is a technical one. Brands must transition from a mindset of "proving the ad worked at all costs" to "understanding the true marginal return of every dollar spent." As corporate boards and CFOs demand greater accountability in tightening economic climates, pressure will mount from the top down to adopt metrics that reflect true bottom-line business impact rather than inflated media metrics.
Conclusion
Target’s openness about the 8% adoption rate is a refreshing dose of reality in an industry frequently prone to hyperbole. Roundel has built the highway for advanced, causal measurement; the challenge now lies in helping advertisers navigate the on-ramps. As the retail media market matures, brands that embrace the friction of incrementality today will secure a distinct competitive advantage tomorrow, leaving behind the comforting illusions of legacy attribution in favor of undeniable, bottom-line growth.