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Best Buy Expands Its Ad Business With Revamped In-House Media Unit
Best Buy’s sales have ballooned in the past year as people spend more on technology and consumer electronics. Now, the retailer is placing a bigger bet on another revenue stream: advertising. The company is debuting Best Buy Ads, an updated version of its in-house media business that offers more services and wider reach for brands…
Best Buy launches its own in-house media network
Believing its combination of deep relationships with its customer base and a massive appetite for technology and electronics will set it apart from the competition, tech retail chain Best Buy is just the latest retailer to start its own in-house media ad-sales operation.
Called Best Buy Ads, the new media network plans to target all manner of potential advertisers, well beyond the endemic tech firms it already counts as trade partners, said Best Buy CMO Frank Crowson. “If you take the depth of our relationships with our customers and the first-party data we have, we can really understand very broad groups of people,” Crowson said. Those non-endemic potential advertisers could come from autos, quick-serve restaurants, gaming, movies, financial, movies and other categories.
Crowson declined to offer an estimate of the amount of revenue Best Buy expects to bring in within its first year of operation (the Richfield, Minn.-based chain’s fiscal year runs from February to January). Various tech partners in running the media network include Criteo and Google.
Best Buy claims to conduct 3 billion interactions each year with customers, and Crowson explained that the firm generates a deeper level of insight from those transactions than other retailers. “It’s not just from a purchasing standpoint, it’s the research people do before they purchase, it’s the installation,” he said. “There’s a real depth of engagement that helps us serve our customers effectively — but can also deliver insights for our ad partners.”
It’s not an understatement to say that Best Buy is entering a crowded market. Retail giants from Walmart to Target have been in the game for a few years, while food chain Albertson’s and home improvement chain Lowe’s got in in just the last year. eMarketer predicts that digital retail media advertising will grow to $41.37 billion in 2022 and break the $50 billion mark in 2023.
Best Buy also announced it is creating what it’s calling a “Career Pathways program” focusing on potential careers in advertising, through its Teen Tech centers, which offer teens a chance to dabble in tech and electronics across the country. Crowson said the program’s goal is to start filling a pipeline of diverse candidates “that address the breadth” of the American population for future advertising careers. Teens in the program will have access to internships, mentorships with professionals and paid work-based experiences.
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