ROAS is a Very Costly Misnomer

Why CFOs are Skeptical of Marketing

Retail media’s growth has always been predicated on closed-loop measurement. It’s the single most important force driving ad dollars today, as demonstrated by Google and Meta during the first two big waves of digital advertising. And retail media’s closed-loop is both the tightest and highest-fidelity.

It’s an attractive proposition to advertisers during any economy, but especially in the current one, as Mike Shields wrote earlier this week:

The past few years in advertising have been marked by Retail Media Fever.

Now, the entire industry may be hit with a case of the Trump Tariff Flu.

So if you thought that this red-hot ad category was already of great interest - just wait. The worry now is whether brands, led by their ROI-hungry Chief Financial Officers, may go overboard with RM spending, even overdosing on RM data.

Whenever the economic conditions get rocky, ad dollars gravitate toward certainty. And tight closed-loop measurement—the version that retail media provides—is as sure a bet as large brands can get.

Right?

That’s why CFOs, who are inherently skeptical of marketing spend, are likely to consider retail media the next best alternative to cutting budgets altogether.

But what if the “returns” promised in the Return-On-Ad-Spend (ROAS) metrics presented to the CFO each quarter weren’t really returns at all?