Latest / Retail Media Breakfast Club / Best Buy's Ad Platform Play: 'We Got Next'
Transcript
- Best Buy - Originally published to The Drum === [00:00:00] Kiri Masters: Best Buy recently announced we got next. Its first advertising showcase that positioned the electronics retailer as a serious player. In media This streaming event on September 16, unveiled [00:00:15] new in-store advertising packages expanded sports partnerships and a roadmap for self-serve capabilities launching in 2025. [00:00:24] But what captured my attention wasn't the main presentation. It was comments that Lisa [00:00:30] Valentino. President of Best Buy ads made on stage at the IAB Connected Commerce Summit in New York the previous week. There, she outlined a vision that goes beyond typical retail media network expansion she said Best Buy could [00:00:45] be an open platform that other retailers could plug into for data collaboration and audience extension. [00:00:51] In a later interview, Valentino said to me if another retailer or another RMN wants to work with us to build out a data set of customers that [00:01:00] might purchase across multiple retailers, where all in now this stands in sharp contrast to the walled garden approach dominating retail media today. [00:01:09] Where over 200 networks compete for advertiser attention, while brands struggle to manage relationships [00:01:15] with an average of just six platforms. In today's episode, I'm going to dive into how Best Buy is building a retail media platform that others can plug into. This is a reproduction of an article that I originally posted to the [00:01:30] drum. [00:01:30] On September 16 titled Inside Best Buy's First Ad Showcase as it makes a major play for retail media budgets. Let's jump in. [00:01:38] [00:01:40] Kiri Masters: Let's talk about what does this kind of platform look like? So Best Buy sees itself [00:01:45] as a potential infrastructure for other commerce players, possibly even other electronics retailers to leverage for data collaboration and audience extension. Lisa Valentino said to me, we think we can partner with anybody who has a commerce presence [00:02:00] that may include retailers, quick serve, restaurants and transport companies. [00:02:03] The logic makes sense by creating mechanisms for cross retailer collaboration. Best Buy could help solve one of retail's most persistent challenges, the inability for brands to efficiently plan and [00:02:15] measure campaigns across multiple retail environments. Now we know that Amazon has also begun pursuing a platform strategy with its Amazon retail ad Service, announcing several retail partnerships at launch and adding Macy's more [00:02:30] recently. [00:02:30] But skepticism remains about how sustainable that model is, given that Amazon competes directly in nearly every category, best Buy by contrast is a category retailer, and that focus may make it a little more welcome as a [00:02:45] partner for others in retail media who see Amazon less as a collaborator and more as a competitor. [00:02:50] Now, just as an aside, this isn't in the original piece, but when I shared this out on LinkedIn, I had an interesting comment come up from Brian Denberg and he [00:03:00] said, cool thoughts question. If I'm say True value hardware and I'm looking for an RMN competitor, why would I pay Home Depot my biggest competitor to provide me with a second tier ad network versus simply paying Amazon a competitor for sure, but perhaps [00:03:15] not to the same degree, to give me a first tier one and. [00:03:19] It's a pretty interesting question. I did touch on it in this article about Best Buy, but my point back to Brian was, at the end of the day, it comes down to what's most appealing to both the [00:03:30] advertisers who are the real customers of a retail media network, as well as the retailers. And just in a completely fictional example, let's take the tool brand Makita. [00:03:41] They might choose. Amazon for its best in class [00:03:45] DSP and massive reach. And This is as a choice of a media platform, even if Amazon. Carries some kind of baggage as a retail partner. On the other hand, a brand like Makita might prefer to advertise more [00:04:00] heavily through Home Depot as a platform because it aggregates the in category shoppers with high intent. [00:04:08] And so that brand would know that they're reaching exactly the right eyeballs. And then for a retailer like [00:04:15] True Hardware, for example, the choice between partnering with Amazon. Or partnering with the Home Depot if they were to set up a similar ad network like this would depend on lots of factors like advertiser access. [00:04:26] That is a huge consideration for retailers. [00:04:30] And the reality is Amazon has a huge volume of advertiser demand. Home Depot may have less. Total advertiser demand, but it would have the most relevant category advertisers. So [00:04:45] access to advertisers and their spending power is a big consideration. But then it would also come down to the commercial arrangement, the ease of integration, the cost, as well as the technology. [00:04:56] So I think that, these are all of the considerations that [00:05:00] retailers are thinking about. Do they partner up with a. Frenemy in this space. Do they join a federation or a consortium like I've started to talk about as well? It seems like there is much more discussion happening and many more [00:05:15] options unfolding that give retailers an alternative to try. [00:05:19] Versus trying to go it alone as a retail media network and stand up something that is going to be attractive to advertisers in isolation. Okay. Little little bit of a [00:05:30] detour with that comment there, but I think it is important to tie all of these things together. Did you know that 60% of shoppers abandoned [00:05:45] carts when product info is wrong? Before you ramp up your ad spend, fix the shelf Acosta group's. Award-winning connected commerce crew is trusted by brands like Coca-Cola and Sanofi to [00:06:00] deliver critical content updates. [00:06:02] Acosta Group handles it all. Then layers on media buying. Learn about Acosta group's connected commerce capability at Acosta Group and tell them Retail Media Breakfast Club [00:06:15] sent you. That's A-C-O-S-T-A group Let's get back to Best Buy. [00:06:23] A couple of collaboration examples that I wanna share with you that sort of paints a picture of this journey that they've been on. [00:06:30] In April, 2024, they partnered with CNET to create a unique commerce media model where advertisers can share ad spaces across both platforms on cnet.com and on Best Buys. [00:06:41] Surfaces with a combined reach of 50 million unique [00:06:45] monthly visitors. The partnership showed early success. 86% of consumers in an in-store test said that C Net's content made them more confident in tech purchases with a 25% lift in purchase intent. [00:06:57] Similarly. Best Buy's Microsoft [00:07:00] collaboration on a campaign called AI that demonstrated sophisticated cross-platform execution with nine vendor partners and more than 50 creative executions across display, digital, video search, social, and in-store [00:07:15] activations. These partnerships, hint at Best Buy's ability to orchestrate complex multi-party collaborations, exactly what a platform play would require. [00:07:25] balancing standards with innovation best buy's. Also wrestling with attention [00:07:30] facing every retail media network. How to comply with emerging industry standards while maintaining flexibility for innovation. [00:07:37] And this is where Best Buy's Vice President of Ads Products, marina Cress Diva. [00:07:42] Told me how the retailer is committing to standards for core metrics [00:07:45] while preserving flexibility for experimental formats. And she said, we will always flag when something is non-standard. We also recognize that over time as the industry catches up, things that are non-standard today could become standard tomorrow. [00:07:59] This is an important [00:08:00] point because. A lot of what Best Buy unveiled a couple of weeks ago was innovative things in-store activations, partnerships that are, you know, experimental. At this stage I. [00:08:12] A couple of other quick hits about this announcement. [00:08:15] Best Buy is upping its integration with Tech Partners. As part of this announcement, it shared that it's now integrating with three DSPs, the Trade Desk, Google's DV 360 and Yahoo DS P. And this was very pleasing to me because I [00:08:30] talked about a survey of media buyers earlier this year by the Commerce Platform, Cody, which found that 96% of media buyers. [00:08:37] Would certainly or will consider buying onsite media via A DSP and 93% would shift [00:08:45] non-retail budgets. Into retail media if they could do so programmatically, and I don't think this is talked about enough, which is the front end to retail media demand. If an advertiser is able to access retail [00:09:00] media placements on site and offsite and make those media buys through a trusted DSP, like the trade desk. [00:09:07] DB 360 Yahoo DSP. It opens up a whole new world of advertiser demand for retailers. [00:09:14] [00:09:15] Wrapping up here, best Buy's platform raises practical questions about the future of retail media. If successful, it could push change from today's fragmented landscape of competing walled gardens toward a more interconnected ecosystem where retailers collaborate. On data [00:09:30] and infrastructure while competing on merchandising and customer experience, and you know, those things that are at the heart of the retail business. [00:09:40] For brands that are exhausted by managing dozens of disparate retail media relationships. [00:09:45] Best Buy's approach could hint at what might work better, but success will require other retailers to embrace a level of openness that has been missing from the retail media landscape thus far [00:09:56] as Lisa Valentino from Best Buy Ads puts it. We are [00:10:00] not going to put boundaries on this because I think boundaries cause limitations in how far we can go. The real test will be whether other retailers agree and whether Best Buy can deliver the technical infrastructure and trust required to make cross retailer collaboration [00:10:15] actually work. [00:10:15]