An upscale department store retailer is the latest retailer to launch its own media company.
Nordstrom is taking its in-house media company, known as the Nordstrom Media Network, from pilot into full rollout. The retailer initially tested the concept with off-site campaigns for brand partners on platforms like Google and Meta, and then successfully piloted Nordstrom Media Network in 2021 with on-site sponsored ads launching in the fourth quarter.
In 2021, the program generated $40 million in ad revenue with hundreds of brand partners, which Nordstrom says exceeded its initial expectations. Nordstrom Media Network is an advertising program that allows Nordstrom brand partners to connect directly with what the retailer says is a base of 32 million by advertising on its digital platforms and through off-site digital advertising.
On-site channels include sponsored product ads and brand pages. Off-site channels include paid social and display ads, YouTube video, search and shopping ads, and affiliate campaigns. Nordstrom serves targeted ads to customers based on their individual purchase and behavioral data.
Participants in Nordstrom Media Network include the L’Oreal Luxe division. Nordstrom considers the program a step in its Closer to You strategy, which calls for investments to build digital businesses, including creating a unified view of the customer as well as the company's product and inventory. The effort is designed to enable Nordstrom to provide personalization at scale and enhance the overall customer experience.
Other major retailers launch proprietary advertising networks
In January 2022,Best Buy Ads, its new in-house media company designed to help its suppliers provide shoppers with targeted, timed promotional messages based on its customer relationships and insights. According to Best Buy, it interacts with its customers 3 billion times a year in-store and online.
Walmart recently rolled out a demand-side platform for suppliers and their media and ad agencies in time for the 2021 holiday season. Initially announced during the introduction of the Walmart Connect media platform in January 2021, the Walmart demand-side platform (DSP) is a collaborative effort with independent demand-side platform The Trade Desk.
Meanwhile, Target launched its Roundel ad network in 2019 as a tool for CPG brands to create personalized digital ad campaigns aimed at Target customers. Roundel helps advertisers connect directly with Target's customers through personalized, relevant marketing messages across Target's owned platforms and hundreds of select off-platform channels.
At least four other big-name national retailers have launched similar digital third-party ad networks in the past year: Family Dollar, Walgreens, Kroger, and CVS. In August 2021, Best Buy began enabling advertisers to use Criteo’s cross-retailer, self-service platform to reach BestBuy.com and BestBuy.ca shoppers in the U.S. and Canada.
"Through Nordstrom Media Network our goal is to create the best experience for our customers while also giving our brands the opportunity to tell their story across platforms," said Scott Meden, chief marketing officer at Nordstrom. "We look forward to growing the program with our brand partners as we strive to create a personalized customer experience that creates more opportunities for inspiration and brand discovery."
In the coming months, the company plans to expand ad placements on Nordstrom.com and NordstromRack.com, as well as improve reporting and targeting capabilities. Nordstrom says it will continue to scale and evolve the program to drive growth, customer connections, and personalized experiences.