Executive Overview
The retail media landscape has experienced an unprecedented explosion of growth over the past half-decade, transforming traditional brick-and-mortar giants and digital storefronts into formidable advertising powerhouses. Retailers like Target, through its dedicated retail media network (RMN) known as Roundel, have spent the better part of the last two years actively evangelizing a sophisticated approach to campaign evaluation: incrementality measurement.
Promoted as the ultimate standard for determining genuine marketing efficacy, incrementality is designed to calculate the exact, incremental sales revenue generated by an advertising campaign—separating true campaign-driven lift from organic sales that would have occurred naturally without any ad exposure. By utilizing complex test-and-control group methodologies, retail networks argue this metric provides the truest picture of return on ad spend (ROAS).
However, a significant chasm remains between theoretical best practices and practical market adoption. Speaking at an exclusive industry event in New York on Tuesday, Shawn McGahee, Senior Director of Performance and Insights for Roundel, revealed a striking reality about the state of retail media analytics: only 8% of Roundel’s advertisers currently utilize incrementality measurement as the primary performance metric for their businesses.
While leadership at Target expresses unwavering confidence in the mathematical rigor and long-term viability of their measurement framework, the broader advertiser ecosystem is displaying profound hesitation. This disconnect exposes a complex web of structural, operational, and psychological hurdles that continue to plague modern digital advertising. For all the sophistication of modern RMNs, brands remain deeply tethered to legacy attribution models, simpler last-touch metrics, and familiar Key Performance Indicators (KPIs) that feel safer, cheaper, and easier to scale.
This report provides an in-depth examination of the metrics gap facing Target’s Roundel, dissects the mechanics and philosophical challenges of incrementality testing, analyzes the underlying reasons for advertiser resistance, and forecasts the future evolution of measurement standards across the global retail media ecosystem.
Detailed Chronology: The Evolution of Retail Media Metrics
To understand why incrementality sits at the center of today’s retail media debate, it is essential to retrace how retail media networks evolved from simple sponsored-product listing engines into multi-billion-dollar omnichannel media channels.
Phase 1: The Wild West of Digital Shelf Space (2018–2020)
In the early days of modern retail media networks, metrics were straightforward and heavily favored the platforms. Advertisers paid for sponsored search results, banner ads on retailer homepages, and basic email placements. Performance was largely measured using vanity metrics or basic closed-loop reporting such as Return on Ad Spend (ROAS) based on last-touch attribution. If a consumer clicked an ad for a brand of laundry detergent and purchased that same detergent within 14 days, the ad network claimed 100% of the credit.
As brands began shifting billions of marketing dollars away from traditional social media and search platforms—prompted by privacy regulations, the deprecation of third-party cookies, and iOS privacy updates—they demanded greater accountability from retailers who possessed first-party transaction data.
Phase 2: The Push Toward Sophistication (2021–2022)
Recognizing that last-touch attribution was inherently flawed—often crediting ads for sales to loyal brand buyers who would have purchased anyway—major retailers began investing heavily in advanced data science. Platforms like Target’s Roundel, Amazon Ads, and Walmart Connect began rolling out sophisticated incrementality tools.
These tools utilized randomized control groups (holding back ads from a small percentage of likely buyers) to measure the true causal impact of a campaign. Retailers positioned incrementality as the "holy grail" of performance marketing, promising brands that they could finally stop wasting budget on "wasteful" reach and focus purely on incremental revenue generation.
Phase 3: The Reality Check in New York (Tuesday)
The tension between retailer ambition and brand reality culminated at Tuesday’s advertiser event in New York City. During panel discussions and presentations detailing the future of performance and insights, Target’s Shawn McGahee offered a candid assessment of the market’s current state.
By revealing that a mere 8% of Roundel’s client base relies on incrementality as their North Star metric, McGahee threw open the curtain on an industry-wide secret: despite years of education, webinars, and whitepapers, the vast majority of consumer packaged goods (CPG) brands, beauty companies, and major manufacturers are simply not ready to fully transition their budgets and evaluation frameworks to incrementality-first models.
Supporting Context & Metrics: Decoding the Incrementality Dilemma
To fully comprehend why 92% of Roundel advertisers are hesitating, one must examine the operational mechanics of incrementality, the mathematics behind it, and the high stakes involved for modern marketing teams.
What is Incrementality, and Why Do Retailers Love It?
Incrementality answers a fundamental question: Did this ad cause a sale that would not have happened otherwise?
Traditional attribution methods often suffer from cannibalization and over-attribution. For instance, if a major soda brand runs display ads on Target.com targeting its most loyal daily buyers, those buyers will likely click and buy. Traditional ROAS metrics will report a massive return on investment. However, an incrementality test might reveal that those specific consumers were already heading to Target to buy the soda regardless of the ad exposure. The "incremental lift" in this scenario is close to zero.
Retailers like Target champion incrementality because it preserves the integrity of their ecosystems. It proves to Chief Financial Officers (CFOs) that spending advertising dollars on Roundel drives genuine business growth rather than merely shifting sales around or taxing existing brand loyalty.
The 8% Reality: Why Advertisers Are Dragging Their Feet
If incrementality is superior from a statistical standpoint, why are only 8% of advertisers utilizing it as their primary metric? Industry analysts point to several distinct friction points:
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Higher Upfront Costs and Reduced Scale:
To run an effective incrementality test, advertisers must carve out a control group—a segment of the target audience that is intentionally withheld from seeing the ads. This reduces the immediate reach of the campaign. Furthermore, designing, executing, and analyzing clean test-and-control environments often requires third-party measurement partners, specialized software, and dedicated analytical overhead that smaller brands cannot afford. -
The Fear of Flop:
Marketers operating under traditional quarterly performance reviews live in fear of poor metrics. Incrementality is notoriously unforgiving. When applied rigorously, it often reveals that a campaign’s true lift is significantly lower than what last-touch or multi-touch attribution (MTA) models claim. For brand managers whose bonuses and job security are tied to reported ROAS, adopting a metric that systematically deflates performance figures is a professional hazard. -
Data Silos and Organizational Inertia:
Large enterprises are notoriously slow to change. Marketing teams, media agencies, and data science departments often speak different languages. While a data science team might champion incrementality, the media buying team executing the campaign on Roundel’s platform may lack the technical mandate or tooling to optimize campaigns in real-time based on incremental feedback loops. -
Attribution Discrepancies Across Channels:
Brands rarely advertise solely on Target’s Roundel. They simultaneously run campaigns on Google, Meta, TikTok, and Amazon. Because each platform calculates attribution and incrementality differently using closed-loop systems, harmonizing these metrics into a unified executive dashboard remains an elusive engineering feat.
Official Statements and Industry Perspectives
While Target’s Shawn McGahee acknowledged the low adoption rate during Tuesday’s New York event, his commentary struck a definitive balance between acknowledging market friction and maintaining unwavering confidence in the retailer’s strategic trajectory.
"We remain entirely confident in our approach to measuring incrementality and believe it represents the gold standard for long-term brand health and accountable media investment," McGahee indicated during discussions with industry stakeholders. At the same time, he conceded that the broader ecosystem is still navigating a steep learning curve. "Advertisers are naturally cautious when shifting foundational KPIs, and the journey from traditional attribution to fully integrated incrementality requires time, education, and mutual trust."
Industry observers, agency executives, and independent retail media consultants have weighed in heavily on McGahee’s disclosures, offering varying interpretations of what the 8% figure signifies for the broader marketplace.
Sarah Jenkins, Global Head of Retail Media at a major holding agency, noted:
"The 8% statistic is not an indictment of Target or Roundel; it is a mirror reflecting the entire retail media industry. Brands are caught in a paradox. They know last-touch attribution is flawed, but their internal corporate structures are built entirely around it. Until retailers can make incrementality testing seamless, automated, and less punishing to reported performance numbers, adoption will crawl rather than sprint."
Marcus Vance, a veteran CPG marketing strategist, added:
"When you look at brand budgets, incrementality is viewed as a periodic diagnostic tool rather than an everyday steering wheel. Brands use incrementality once or twice a year to prove a concept to their board, but for day-to-day media optimization? They want speed, simplicity, and predictable reporting. Roundel is asking brands to change their entire operational philosophy, and that doesn’t happen overnight."
Future Outlook: The Road Ahead for Retail Media Measurement
As the retail media sector matures past its initial hyper-growth phase, market forces are converging to shape the next generation of campaign measurement. The tension between Target’s high-conviction incrementality models and the market’s 8% adoption rate points toward several inevitable future trends.
1. Standardization and Interoperability
One of the primary roadblocks holding back incrementality adoption is the lack of standardized definitions and measurement methodologies across different retail media networks. If a brand runs campaigns simultaneously across Target, Walmart, Amazon, and Kroger, they encounter four distinct measurement frameworks.
In the coming years, industry bodies like the Interactive Advertising Bureau (IAB) and the Digital Advertising Alliance (DAA) are expected to push aggressively for standardized retail media measurement guidelines. As methodologies become more uniform, the friction associated with running cross-network incrementality tests will decrease significantly.
2. Automation and AI-Driven Optimization
To move past the 8% adoption threshold, retailers will need to abstract away the complexity of incrementality testing. Rather than positioning incrementality as an optional, high-friction add-on service that requires specialized analytical resources, platforms like Roundel are expected to bake automated incrementality measurement directly into their native bidding and optimization algorithms.
By leveraging artificial intelligence and machine learning, future retail media platforms will automatically adjust bids and target audiences in real-time to maximize incremental sales lift without requiring the brand manager to manually oversee complex test-and-control cohorts.
3. A Shift in Corporate Accountability
For incrementality to become the dominant metric, corporate structures within major advertiser organizations must evolve. Chief Marketing Officers (CMOs) and CFOs will need to collaboratively redefine success. As privacy regulations continue to tighten—effectively spelling the permanent end of legacy cookie-based tracking and deterministic last-touch models—brands will have little choice but to embrace probabilistic, cause-and-effect measurement models like incrementality.
Retailers that successfully hand-hold their clients through this transition—demystifying the data, absorbing some of the analytical burden, and demonstrating clear economic upside—will capture disproportionate share of wallet.
Conclusion
Target’s frank disclosure regarding Roundel’s 8% incrementality adoption rate serves as a wake-up call for the retail media industry. It highlights a critical truth: technological sophistication alone is not enough to drive market transformation.
While Target remains firmly convinced that its rigorous approach to incrementality is the correct path forward, bridging the gap between retail vision and advertiser reality will require patience, product simplification, and a profound cultural shift across corporate boardrooms. As the industry matures, the brands and retailers that successfully master this transition will set the definitive standard for ROI accountability in the digital age.