"Seriously, guys. Enough with the ROAS (return on ad spend) obsession. It's time for a smarter approach to measurement that focuses on more than short-term outcomes, says Melanie Babcock-Brown, VP of media and monetization for Orange Apron Media, The Home Depot's retail media network. When retail media took off around five years ago, retailers concentrated on the bottom of the funnel, because that's relatively easy to do, says Babcock-Brown on this week's episode of AdExchanger Talks."
"High ROAS won't capture the full value of a long consideration period, and it won't give an advertiser much - if any - insight into how their media is driving incremental growth, brand equity, new customer acquisition or long-term loyalty. And so The Home Depot developed a new framework called ROMO - it stands for "return on marketing objective" - to measure the overall impact of retail media campaigns across the entire customer journey."
"And that's especially true for brands like The Home Depot with long customer journeys. Some home improvement buying decisions are necessarily made quickly. If someone's refrigerator breaks, they typically replace it within 48 hours. But it could take six months to decide on a new paint color for their walls or a year to get started on that kitchen project they've been thinking about, Babcock-Brown says."
Retail media initially focused on bottom-of-funnel metrics and short-term ROAS to secure quick wins when networks launched around 2019. ROAS prioritizes immediate transactions and fails to capture long consideration periods for some home improvement purchases. Home Depot notes shopping timelines vary from 48 hours for appliance replacement to months or a year for projects such as paint or kitchens. High ROAS cannot measure incremental growth, brand equity, new customer acquisition, or long-term loyalty. Home Depot developed ROMO (return on marketing objective) to assess retail media impact across the entire customer journey and support long-term relationship building.
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