---
title: "Retail Media or Trade Promotion? Put Both Through One Profit Test"
standfirst: "Buyers are dropping ROAS for incrementality; a brand needs one incremental-profit test for the retail media and trade lines in every joint business plan."
url: https://www.motionandgain.com/insights/retail-media-vs-trade-promotion
type: "Challenge & Resolution"
publisher: "Motion & Gain"
author: "Motion&Gain"
published: 2026-11-05
updated: 2026-11-05
tags: ["Retail media", "Pricing & promotions", "Marketing ROI", "Revenue growth management", "Consumer goods"]
summary: "European buyers are dropping ROAS for incrementality. How to judge retail media and trade promotion on one incremental-profit test per retailer."
hero_image: https://wcokbflnhololtfdocak.supabase.co/storage/v1/object/public/article-images/ai/2026-11/retail-media-vs-trade-promotion-bb896223.webp
hero_image_ai_generated: true
access: public
language: en
---

# Retail Media or Trade Promotion? Put Both Through One Profit Test

*Buyers are dropping ROAS for incrementality; a brand needs one incremental-profit test for the retail media and trade lines in every joint business plan.*

Challenge & Resolution · Motion&Gain · 5 November 2026

Hero image: AI-generated illustration (labelled "AI GENERATED" on the page).

Retail media and trade promotion now compete for the same money in the same retailer, and neither proves its return by default. The buyers have noticed: in IAB Europe's 2026 survey, published on 3 November, the share of European buyers who want ROAS fell from 89% to 49% on a like-for-like base, while 57% now ask for incrementality. A brand that lets two teams buy these lines on two different metrics cannot say which euro earns more. The fix is one incremental-profit test per retailer, applied to both.

**Key takeaways**

- 49% of European buyers want ROAS as a retail media metric in 2026, down from 89% a year earlier on IAB Europe's like-for-like base; 57% now want incrementality.
- Half of buyers moving money into retail media take it from brand budgets and 36% from trade budgets (IAB Europe 2026, Europe and MENA), so the test must cover both lines.
- Return on retailer networks swung 6.5x on measurement method alone in a 42-campaign grocer study, and nearly two-thirds of price promotions lose money.

**49%**: of European buyers want ROAS as a retail media metric in 2026, down from 89% a year earlier on IAB Europe's like-for-like European base ([IAB Europe, 2026](https://iabeurope.eu/iab-europes-latest-retail-media-report-reveals-growing-gap-between-buyer-expectations-and-measurement-capabilities/))

The [third Attitudes to Retail Media report from IAB Europe](https://iabeurope.eu/iab-europes-latest-retail-media-report-reveals-growing-gap-between-buyer-expectations-and-measurement-capabilities/), 150 buyers and sellers across Europe and MENA, reads like a change of mood. Unified online and offline reporting (66%) and new-to-brand sales (63%) now rank above the network's own return figure, and 61% of European buyers name weak measurement and reporting as a barrier to spending more. The committee chair, from WPP Media, put it plainly: "Buyers are outgrowing ROAS."

> **Retail media** is advertising a retailer sells on its own sites, apps and stores, targeted and measured with its shopper data. **Trade promotion** is what a brand pays the same retailer for price cuts, displays and features.

## The challenge: retail media's easy growth is ending

The channel is still expanding. [IAB Europe's AdEx Benchmark 2025](https://www.exchangewire.com/blog/2026/07/07/iab-europes-adex-benchmark-2025-report/) estimates on-site spend at EUR 13.3bn in 2025, up 16.7% and, on [PPC Land's reading of the detail](https://ppc.land/iab-europe-retail-media-gains-16-7-as-video-passes-half-of-eu-display/), more than 10% of Europe's digital advertising for the first time. That total counts search and display on retailers' own sites only; in-store screens sit outside it. Those keep spreading: on 30 October Eroski said it had added screens in 38 more Spanish stores to a network of over 400, [reported ESM Magazine](https://www.esmmagazine.com/technology/eroski-expands-in-store-retail-media-network-324767). The closed-loop leaders are pulling away too. [Walmart's global advertising grew 38%](https://corporate.walmart.com/news/2026/08/20/walmart-releases-q2-fy27-earnings) in the quarter to 31 July 2026, and Walmart Connect in the US 43% excluding VIZIO, while group revenue rose 5.9%.

The forecasters still expect a slowdown. WARC sees the global market passing USD 200bn in 2026 but forecasts growth outside Amazon at 9.8% in 2027 and European growth falling to single digits, as [invidis reported in August 2026](https://invidis.com/news/2026/08/retail-global-retail-media-ad-market-forecast-to-top-200b-in-2026/).

**Chart: Retail media growth is forecast to fall below 10% outside Amazon by 2027** (Retail media ad spend growth, % year on year, Europe (actual) and global (estimate and forecast), 2025-2027)

![Column chart: Europe's retail media grew 16.7% in 2025 and WARC estimates global growth at 13.7% for 2025, but forecasts 11.5% globally and 9.8% excluding Amazon in 2027.](https://www.motionandgain.com/charts/a80f9e5dd2b3f753608e-w.svg)

*Source: [IAB Europe AdEx Benchmark 2025; WARC Media, Nov 2025 and Aug 2026 forecasts](https://invidis.com/news/2026/08/retail-global-retail-media-ad-market-forecast-to-top-200b-in-2026/). Europe = on-site search and display only, 30 markets (IAB Europe). Global figures are WARC estimates and forecasts in USD, not M&G models. [Data (CSV)](https://www.motionandgain.com/charts/a80f9e5dd2b3f753608e.csv) · Chart: Motion & Gain*

A line that stops growing on new money grows on someone else's, and the next euro for a retailer's network is negotiated in the same joint business plan as the trade budget.

## Whose money pays for retailer networks?

Brand budgets first, trade second. IAB Europe's 2026 report gives the first European reading: of the buyers who re-allocated money into retail media, half took it from brand advertising and 36% from trade budgets, ahead of performance and social at 31% each. The base is small (42 buyers, Europe and MENA, several answers allowed), and it counts buyers naming a source, not euros moved.

**Chart: Retail media money comes from brand budgets first and trade second** (Budgets buyers re-allocate into retail media, % of re-allocating buyers citing each, Europe and MENA, 2026)

![Bar chart: half of buyers re-allocating money into retail media take it from brand budgets and 36% from trade budgets, ahead of performance and social at 31% each (IAB Europe, 2026, n=42).](https://www.motionandgain.com/charts/0317324e9cd6126d7296-w.svg)

*Source: [IAB Europe, Attitudes to Retail Media 2026 (Q19)](https://iabeurope.eu/wp-content/uploads/IAB-Europes-Attitudes-to-Retail-Media-Report-2026.pdf). Industry-body survey, multi-select, n=42 buyers incl. MENA. Share of buyers citing a source, not share of spend. Trade, performance and social read from the report's chart. [Data (CSV)](https://www.motionandgain.com/charts/0317324e9cd6126d7296.csv) · Chart: Motion & Gain*

US surveys measure something different, the share of spend, and put the trade-funded part at 20% ([Path to Purchase Institute with TransUnion](https://newsroom.transunion.com/seven-in-ten-companies-plan-to-increase-retail-media-budgets-but-scale-and-measurement-remain-key-barriers/), 67 professionals, 2024) to 36% ([a Forrester survey reported by Digiday](https://digiday.com/marketing/marketers-and-agencies-grapple-with-divisions-over-who-controls-retail-media-spend/)). That is US survey context, not a European finding, and the two 36% figures measure different things. The P2PI study also found about 70% of US network spend incremental to annual trade budgets, a figure a June 2026 white paper from Incremental, a measurement vendor, repeats, as [PPC Land's trade promotion explainer](https://ppc.land/trade-promotion/) summarises.

So the question in the joint business plan is wider than network against trade. The retailer's network competes with the brand's own media money as well, and the test has to cover both lines.

## Why the usual fix fails: comparing ROAS with promotion uplift

Two teams buy the two lines. Key account managers own trade terms and judge them on promotional uplift; brand and media teams own the network budget and judge it on the return the retailer reports. The numbers never meet. Market structure makes it harder: Amazon took 78% of US network spend in 2025, on Walrus Intelligence data cited by WARC and [reported by TheDesk](https://thedesk.net/2026/08/warc-retail-media-ad-market-to-top-200-billion-as-growth-slows/), and more than two-thirds in the five largest European markets. Outside Amazon, a brand buys from many smaller networks, each with its own metrics.

The buyers now say so. In the IAB Europe survey, 58% of buyers in Europe and MENA want multi-touch attribution, but only 31% of sellers offer it, and concern about data availability among European buyers jumped from 31% to 58% in a year. Only 53% of CMOs told [NIQ and Unlimitail in mid-2026](https://nielseniq.com/global/en/insights/analysis/2026/retail-media-incrementality-measurement/) that networks measure adequately.

**Chart: European buyers now ask for incrementality ahead of ROAS** (Desired retail media measurement metrics, % of European buyers selecting each, 2026)

![Bar chart: in 2026, 66% of European buyers want unified online and offline reporting, 63% new-to-brand and 57% incrementality, while ROAS falls to 49% (IAB Europe, n=35).](https://www.motionandgain.com/charts/e4f37235a5359df85971-w.svg)

*Source: [IAB Europe, Attitudes to Retail Media 2026 (Q26)](https://iabeurope.eu/wp-content/uploads/IAB-Europes-Attitudes-to-Retail-Media-Report-2026.pdf). Industry-body survey, multi-select, European buyers n=35. Unified = online and offline reporting. ROAS was chosen by 89% in 2025 on the same base; the option list grew in 2026. [Data (CSV)](https://www.motionandgain.com/charts/e4f37235a5359df85971.csv) · Chart: Motion & Gain*

The trade line is no better measured. The evidence on each side sits below.

| Evidence | Result |
| --- | --- |
| **Retail media, return by method:** 42 on-site display campaigns, one US grocer network, matched controls (2026) | iROAS varied 6.5x on average (median 2.5x) |
| **Retail media, sign of return:** the same 42 campaigns | 83% could flip from positive to negative |
| **Trade promotion, break-even:** 39m US promotional events (Nielsen, 2014) | Almost three-quarters did not break even |
| **Trade promotion, literature review:** price promotions, summarised by Kantar and Les Binet (2026) | Nearly two-thirds lose money |
| **Trade promotion, proof:** UK promotion decision-makers, n=250 (Kantar / Censuswide, Aug 2026) | 75% cannot say how many paid |

*Sources: [Ovative Group, Albertsons Media Collective and Northwestern Kellogg professors, Retail Media iROAS Demystified](https://ovative.com/wp-content/uploads/2026/03/Retail-Media-iROAS-Demystified-Executive-Summary.pdf) (2026, retailer co-authored); [Nielsen via PPC Land](https://ppc.land/trade-promotion/) (2014, long-run evidence); [Kantar and Les Binet via PPC Land](https://ppc.land/75-of-marketers-cant-say-if-their-price-promotions-pay-kantar-finds/) (2026). The rows sit side by side; they are not a head-to-head comparison.*

In the network study, run by Ovative Group with Albertsons Media Collective and Kellogg School professors, the swing came only from how the control group was matched. On the trade side, the Nielsen figure is long-run evidence from 2014, and in August 2026 three in four UK promotion decision-makers told Kantar they could not say how many of theirs paid. We made the trade case in [Trade Promotion Is Your Biggest Budget](https://www.motionandgain.com/insights/trade-promotion-prove-it-pays); the same measurement gap now sits on the line next to it.

No public study compares the two channels on the same incremental-profit basis. A brand that says one beats the other is holding two different rulers.

## The resolution: one incremental-profit test per retailer

Motion & Gain's decision rule: **move money between trade, network advertising and the brand media that funds it only toward the line with the higher measured incremental gross profit at that retailer.** Four decisions make the rule work.

### 1. One owner and one envelope per retailer

Owner: the CCO, with the key account director and the brand lead. Put trade terms, the network budget and the brand media earmarked for each retailer into one envelope in the 2027 joint business plan, with one person accountable for that retailer's P&L. Two budgets with two owners get defended, not compared. Retailers see the same gap: in the AECOC category-management survey that Eroski cites, only 10% of companies run fully integrated shared business plans.

### 2. One metric for both lines

Owner: the head of revenue growth management, with finance. Judge every line on incremental gross profit per euro, measured test against control: holdout stores for a promotion, holdout stores or audiences for media. Take attributed ROAS and gross promotional uplift off the scorecard; both count sales that would have happened anyway.

### 3. A measurement clause before money moves

Owner: the key account director. Before shifting a euro from trade into a network, write the test into the contract: the holdout design, access to store-level sales or a data clean room, and who pays. The Ovative study shows why the brand should agree the matching method up front rather than accept the network's default. Eroski's own claim of positive sales against control stores, with no lift size published, is the kind of result to ask to see in full.

### 4. A quarterly reallocation rule

Owner: the commercial review, chaired by the CFO. Each quarter, shift a fixed share of the envelope toward the line that measured higher at that retailer, and freeze any line that was not measured. It costs the media team its automatic growth and the account team its automatic renewals.

Our position, which no public study has yet tested: network advertising earns a larger share of a retailer's envelope only where it comes with closed-loop, test-versus-control measurement. Buyers are cooling on the promise itself; closed-loop attribution as a reason to buy fell to 46% of European buyers in IAB Europe's 2026 survey. Retailers sell AI-driven attribution as the reason to move money. Ask for the control group first.

In the Motion & Gain [commercial value chain](https://www.motionandgain.com/ai-transformation#framework), this joins Corridor 2, Boost Consumer Engagement Effectiveness (reach, O7, and quality trials, O9), with Corridor 3, Extract Value Through Route-to-Market Excellence (trade engagement, O15). Delivery platforms raise the same question on a different shelf, as we argued in [Grocery Delivery Apps Are Becoming the Shelf](https://www.motionandgain.com/insights/grocery-delivery-apps-shelf).

## How to apply it: 30/60/90 days

1. **30 days:** list every network, brand media and trade line by retailer for the 2027 plans, with its owner and how it is measured today.
2. **60 days:** run one paired test at one retailer, a network campaign and a promotion of similar cost, each with holdout stores or audiences, judged on incremental gross profit.
3. **90 days:** write the measurement clause and the reallocation rule into the 2027 joint business plan template.

## Questions leaders ask

### What is retail media, and why does it compete with trade spend?

It is advertising a retailer sells on its sites, apps and stores, targeted and measured with its shopper data. It competes with trade spend because both are negotiated with the same retailer in the same joint business plan, and in IAB Europe's 2026 survey 36% of buyers re-allocating money into the channel took it from trade budgets. With WARC forecasting growth outside Amazon at 9.8% in 2027, more of the next euro has to come from an existing line.

### How do we measure retail media incrementality fairly against promotions?

Use one ruler for both: incremental gross profit per euro, measured against a control group the brand helps design. Holdout stores work for promotions; holdout stores or audiences work for media. Agree the matching method in advance: in a 2026 study of 42 campaigns at one US grocer network, measured incremental return varied 6.5x on average on method alone. No public study yet compares the two channels head to head, so each brand has to run its own paired test.

### Should network advertising money come out of trade or brand budgets?

It depends on which line measures better at each retailer, which is why the decision belongs in one envelope. In Europe and MENA, half of re-allocating buyers draw on brand budgets and 36% on trade, in IAB Europe's 2026 survey. Move money only toward the line that proves the higher incremental profit.

---

Source: https://www.motionandgain.com/insights/retail-media-vs-trade-promotion  
Cite as: Motion & Gain, "Retail Media or Trade Promotion? Put Both Through One Profit Test", 5 November 2026, https://www.motionandgain.com/insights/retail-media-vs-trade-promotion  
Editorial standards: https://www.motionandgain.com/insights/editorial-standards