Macy’s is taking the next step with its ad business.
On Monday, Macy’s, the largest department store chain in the US, announced a partnership with The Trade Desk for self-serve advertising powered by Macy’s data.
The Macy’s Media Network was formed in 2020, almost three years ago. But the ad sales group was focused primarily on its owned-and-operated media, including its sites (Macy’s also owns Bloomingdale’s), apps and miscellaneous retail placements, such as package inserts and screens in stores.
Although the arrangement with The Trade Desk isn’t exclusive and Macy’s will likely add other partners, this is the first time Macy’s is allowing a third-party demand partner and vendor to target Macy’s audience segments around the web.
And “I do believe The Trade Desk will become our primary partner” for off-site ads, said Melanie Zimmermann, who leads the Macy’s Media Network.
Choosing your style
Macy’s also represents a first for The Trade Desk.
It’s the first major retailer to partner with TTD that isn’t a national grocery or convenience store, said Ben Sylvan, GM of data partnerships at The Trade Desk, which has deals in place with Walmart, Albertson’s and Walgreens.
Macy’s took its time to evaluate the programmatic ecosystem and consider how ad tech fits into its media network.
The Trade Desk handles only off-site ads for Macy’s, and is the self-service sign-in option for advertisers. The Trade Desk also allows brands to onboard their CRM data and match to Macy’s audiences, or advertisers can also use prepackaged audiences.
For example, Macy’s is able to make shopper segments for customers who buy Nike sneakers, say, or designer jeans. But Macy’s also has a unique capability to make “life stage-based segments,” Sylvan said.
Macy’s and Bloomingdale’s are both big registry operators and sell furniture as well as clothing, which means the media network can package audiences around key lifetime (and consumer) moments like weddings and new babies.
But Macy’s isn’t turning over its O&O experiences. A managed service group within the Macy’s Media Network will still control advertising on its first-party properties, just like Macy’s wouldn’t let a media company control the shopper experience in a store.
But while Macy’s is keeping a tight grip on its own media, it has a relatively open approach with third-party, self-service pipes.
Walmart, by contrast, also uses The Trade Desk as a self-service DSP sign-in and as a programmatic salesforce of sorts. But it actually has a walled garden model. The Walmart Connect DSP looks and works just like The Trade Desk, but its ad IDs can’t be reconciled to broader TTD campaigns.
Macy’s data, however, can be used in conjunction with open programmatic.
“When we launched this strategy, it was very important to me that it’s very flexible and in tune with how media buyers want to operate,” Zimmermann said. “It’s not a white-labeled instance of The Trade Desk.”
New fashions
Because Macy’s has been focused on its own site, content and managed service business, it hasn’t had much call for non-endemic advertisers.
Although it does work with some non-endemic brands, such as food services companies, that’s because Macy’s has food and café options in its stores. But for The Trade Desk, non-endemic is where the opportunity lies.
Life-stage targeting around weddings and babies has clear potential value to categories such as finance and insurance. Diapers aren’t carried in Macy’s, but diaper brands pay dearly to reach people they know are pregnant, in the hopes of establishing a years-long buying habit.
Travel companies, too, might want to target people who purchase high-end clothing as a proxy for income, or go straight for shoppers of new bathing suits or out-of-season ski gear.
But despite its own growth and contribution to profits, the Macy’s retail media business must also serve the company’s overall priorities. For instance, Macy’s wants its online shopping experience to be more visual and to include more elements of storytelling and video content on landing pages, Zimmermann said.
Jazzing up its sites and apps is also “in tune with the broader mission of Macy’s to be a destination where customers can discover a style and be inspired,” she said.
In stores, Macy’s can invest more in training per associate and has actual tailors, for instance, not just people who point shoppers to the right aisle. The media network is part of an overall plan for how Macy’s might recreate that more premium shopping experience, but online.
The ads business is also a lever to increase basket size, cross-sell certain items and even to maximize employee time.
Macy’s CEO Jeff Gennette told investors last year that an important contribution of the media business is that it can help direct ecommerce sales to stores that are best equipped to either ship items or handle buy online/pick-up in store orders.
Saving Macy’s employee hours is a key metric that doesn’t show up in media plans.
“We are trying to not just see this as a little entity that produces some profit,” Zimmermann said. “We’re really trying to leverage these advertising capabilities to enhance the customer experience and ultimately serve our broader business.”
