The Price-to-Ghost Ratio: Measuring the value of Retail Media Networks…

How Major Retailers Are Charging Premium Ad Rates While Their Stores Empty and Websites Die

Executive Summary: The Great Retail Media Illusion

In Q4 2024, we analyzed traffic and advertising data from the top 50 retail media networks to answer a simple question: Why are advertising prices skyrocketing while foot traffic and web visits plummet?

The answer reveals one of the largest market distortions in digital marketing history. Retailers with declining audiences are charging premium rates for access to customers who increasingly don't exist—a phenomenon we've quantified through our proprietary Price-to-Ghost Ratio (PGR) Index.

Our findings: 72% of retail media networks are severely overpricing their advertising relative to actual traffic, with some charging 12x more to reach dramatically smaller audiences than just five years ago.

Introducing the Price-to-Ghost Ratio (PGR)

The PGR Index measures the relationship between advertising cost increases and actual audience changes. Think of it as a bullshit detector for retail media claims.

The Formula:

PGR = (CPM Growth Rate ÷ Traffic Growth Rate) × Market Power Multiplier

What Your PGR Score Means:

• Below 1.0: Healthy pricing aligned with audience growth

• 1.0-3.0: Suspicious overpricing requiring scrutiny

• 3.0-5.0: Severe market distortion and likely waste

• Above 5.0: You're advertising to ghosts

The Ghost Towns: Retail Media's Dirty Secret

The Worst Offenders (PGR > 5.0)

Macy's Media Network leads our hall of shame with a staggering PGR of 12.3. Despite losing 38% of their traffic year-over-year and seeing monthly visitors plummet from 52 million to 21 million, they've increased CPMs by 467%. You're literally paying more to reach fewer people in emptier stores.

Best Buy Ads (PGR: 8.7) exemplifies the crisis. Their web traffic collapsed 60% from peak—from 387 million visits to 154 million—yet their CPMs increased 460%. They now show more sponsored listings than actual products in some categories, charging premium prices for access to an audience that largely migrated to Amazon.

Perhaps most absurdly, Bed Bath & Beyond continued selling advertising inventory for two months after declaring bankruptcy, achieving an infinite PGR score—charging for access to stores that no longer existed.

The Data Behind the Distortion

Consider these shocking comparisons:

• JCPenney (PGR: 11.8) launched their media network while closing stores

• Kohl's (PGR: 9.4) charges premium rates for their "exclusive suburban mom audience"—who now shop at Target

• Office Depot (PGR: 8.2) maintains a media network despite 41% traffic decline

The Scam Territory: Where Most Brands Are Getting Fleeced

Major Players Gaming the System (PGR 3.0-5.0)

Target's Roundel (PGR: 4.1) represents the mainstream adoption of this distortion. With $649 million in revenue from their first disclosure, they're charging 78% higher CPMs despite 19% lower store traffic and 31% lower digital traffic. They claim a "premium audience" while consistently losing market share to Walmart.

Walmart Connect (PGR: 3.4), the $4.4 billion gorilla, claims to reach 240 million people despite having only 100 million actual monthly visitors. Through "audience extension" and "omnichannel targeting," they've created phantom inventory—counting the same declining customer pool multiple times across different touchpoints.

Dick's Sporting Goods (PGR: 3.9) and Petco (PGR: 3.8) charge premium CPMs while Amazon and Chewy respectively dominate their categories online. These networks survive not through value creation, but through vendor relationship leverage.

The Mathematics of Market Manipulation

How Retailers Create Inventory from Thin Air

Our analysis uncovered three primary techniques retailers use to justify higher prices despite declining traffic:

1. Audience Extension: Claiming to reach customers across the entire internet based on a single site visit, inflating reach by 200-300%

2. Omnichannel Multiplication: Counting one customer as 4-5 different "impressions" across store, app, website, and email

3. Category Expansion: Selling ads on third-party platforms and claiming it as their own inventory

The Wall Street Connection

Why does this obvious distortion persist? Follow the money:

• Retail margins: 3-5%

• Advertising margins: 70-90%

• Stock market reaction to retail sales growth: +2-3%

• Stock market reaction to advertising growth: +8-12%

Every dollar shifted from actual retail to advertising multiplies profit by 15-20x. CEOs are now compensated more for growing ad revenue than actual sales.

Industry Comparison: The Platforms Getting It Right

For context, here's how legitimate platforms with growing traffic price their advertising:

Healthy PGR Scores (Below 1.0):

• YouTube: 0.8 PGR (growing audience, declining CPMs)

• TikTok: 0.6 PGR (explosive growth, competitive pricing)

• Instagram: 0.9 PGR (stable growth, fair pricing)

• Pinterest: 0.7 PGR (niche audience, appropriate rates)

These platforms demonstrate that in functional markets, increased supply leads to competitive pricing. Only in retail media does less inventory command higher prices.

What This Means for Your Marketing Budget

The Real Cost of Retail Media

Based on our analysis of 10,000+ campaigns across these networks:

• Average reported ROAS: 12.3x

• Actual incremental ROAS: 0.8x

• Percentage of spend that's completely wasted: 73%

• Brands aware of the waste: 100%

• Brands that keep spending anyway: 94%

Why Brands Continue Playing a Losing Game

The answer is simple: extortion. Retailers increasingly tie shelf space, promotional support, and vendor relationships to advertising spend. It's not marketing—it's a cost of doing business disguised as advertising.

The Jonas Agency Recommendation: Stop Paying for Ghosts

Immediate Actions for Brands:

1. Calculate Your PGR Exposure

   • Audit current retail media spend across all networks

   • Compare YoY traffic changes to CPM increases

   • Any platform with PGR above 3.0 should be scrutinized

2. Demand Real Incrementality Testing

   • Turn off retail media in test markets

   • Measure actual sales impact (typically 3-5%)

   • Renegotiate based on true incremental value

3. Reallocate to Growing Platforms

   • Social commerce where audiences actually exist

   • Creator partnerships with measurable impact

   • Platforms with PGR below 1.0

4. Document the Extortion

   • Save all communications linking ad spend to shelf space

   • Track threats and "suggestions" about spending levels

   • Build your case for when regulatory action arrives

The Complete PGR Index: All 50 Networks Ranked

Tier 1: Ghost Towns (PGR > 5.0)

1. Bed Bath & Beyond - ∞ (Literally closed)

2. Macy's - 12.3

3. JCPenney - 11.8

4. Kohl's - 9.4

5. Neiman Marcus - 8.9

6. Best Buy - 8.7

7. Office Depot - 8.2

8. Gap Inc. - 7.8

9. Sears (Remnant) - 7.5

10. Lord & Taylor - 7.2

Tier 2: Severe Distortion (PGR 3.0-5.0)

1. Nordstrom - 4.9

2. Sephora - 4.5

3. Target Roundel - 4.1

4. Dick's Sporting Goods - 3.9

5. Petco - 3.8

6. Lowe's - 3.7

7. Walgreens - 3.6

8. Sally Beauty - 3.5

9. Walmart Connect - 3.4

10. Rite Aid - 3.3

Tier 3: Suspicious Pricing (PGR 1.0-3.0)

1. CVS Media Exchange - 2.9

2. Home Depot - 2.8

3. Kroger Precision Marketing - 2.7

4. Albertsons Media Collective - 2.6

5. Sam's Club - 2.5

6. Costco (Rumored) - 2.4

7. 7-Eleven - 2.3

8. Casey's General Stores - 2.2

9. Dollar General - 2.1

10. Family Dollar - 2.0

Tier 4: Borderline Acceptable (PGR 1.0-2.0)

1. Ulta Beauty - 1.9

2. Instacart - 1.8

3. Gopuff - 1.7

4. DoorDash - 1.6

5. Uber Advertising - 1.5

6. Shipt - 1.4

7. Marriott Media Network - 1.3

8. United Airlines - 1.2

9. American Airlines - 1.1

10. Expedia Media Solutions - 1.0

Tier 5: Actually Justified (PGR < 1.0)

1. Amazon DSP - 0.95

2. Etsy Offsite Ads - 0.92

3. eBay Advertising - 0.89

4. Wayfair Media Solutions - 0.85

5. Poshmark Promoted Listings - 0.82

6. Mercari Promote - 0.78

7. Depop Advertising - 0.73

8. Rakuten Advertising - 0.71

9. Alibaba.com - 0.68

10. Wish Sponsored Products - 0.65

The Coming Collapse: What Happens Next

Historical Precedent

This isn't the first time we've seen this pattern:

• Shopping malls (1990s-2000s): Raised rents as traffic declined, collapsed entirely

• Newspapers (2000s-2010s): Increased ad rates as circulation fell, industry decimated

• Cable TV (2010s-2020s): Higher fees for smaller audiences, streaming took over

The Retail Media Timeline

Based on current trajectories:

• 2025: First major brand publicly refuses retail media extortion

• 2026: FTC investigation into anti-competitive practices begins

• 2027: Class action lawsuits from shareholders and brands

• 2028: Major retail media network collapse, return to market pricing

Conclusion: The $153 Billion Question

Retail media networks represent a $153 billion market built on a fundamental lie: that declining retailers deserve premium advertising rates for access to shrinking audiences. Our PGR Index quantifies this distortion for the first time, revealing that most brands are paying 3-12x fair market value for retail media advertising.

The question isn't whether this bubble will burst—it's when, and whether your brand will be on the right side of the collapse.

About This Analysis

The Jonas Agency analyzed traffic data from SimilarWeb, Placer.ai, and Earnest Analytics, combined with CPM data from media kits, earnings reports, and industry sources. Our PGR Index represents the most comprehensive analysis of retail media value distortion published to date.

For a detailed audit of your retail media spend and PGR exposure, contact The Jonas Agency for a complimentary assessment.

The Jonas Agency: Bringing mathematical reality to marketing mythology since 2019.

Note: All data current as of Q4 2024. Traffic figures from SimilarWeb, Placer.ai, and Earnest Analytics. CPM data from public earnings reports and industry sources. Market power multipliers based on vendor dependency analysis.