Hi readers, this is James Hercher, AdExchanger senior editor, with the weekly Commerce Media dispatch.
Today, I’m doing a deep-dive Q&A with Melanie Babcock, who’s been at The Home Depot for almost 10 years. She began her time there in marketing and media buying, but recently became VP of Retail Media+ (Home Depot’s ad platform) and monetization in February, with her responsibilities shifting to focus entirely on the revenue-generating ad business.
The Home Depot’s advertising operation reached a point where the CEO decided to dedicate a full-time officer to the business, Babcock told me.
The rest, as they say, is history.
Or, actually, it’s the future.
AdExchanger: What inventory does The Home Depot have in the retail media platform?
MELANIE BABCOCK: The media comes in three buckets. We have, of course, our own properties, which could be either email, in-app or websites, which we refer to as “on-site.” And we have an equally healthy business off-site, with media partners like Meta, Google and Pinterest, as well as programmatic partners. Third, we have in-store placements, which we call “offline.”
Do advertisers select by channel to spend, or does The Home Depot serve across all three at its discretion?
It can depend. Big household name brands that are working with us on data science, media buys, joint business plans and more in an agency or consultative model, we may be utilizing all three. But there are more than two million SKUs online to maybe 30,000 or 40,000 SKUs in-store, so many brands are only selling online and they’d buy on-site only or maybe some off-site mix.
It sounds like a fully managed service.
It is.
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It’s interesting because I also study those bigger retail media networks, especially in grocery, that have gotten head starts. We have a very good relationship with some of those grocery stores to compare notes about decisions around our retail media networks. Everyone’s trying to go to the self-serve model.
Grow faster at less headcount; I get the appeal. But when we look at our suppliers, we have to be realistic about if they’re comfortable buying media this way. And nine times out of 10, The answer is no.
It’s also just part of The Home Depot’s differentiation. What sets us apart as a retailer also sets us apart as a retail media network. Customer support is in our DNA. If we’re going to pride ourselves on service to those suppliers, why go all-in on self-service?
Do you ever separate The Home Depot data from advertising to use for attribution or analytics on another platform?
It’s definitely on the agenda.
It’s something that gets talked about a lot our chief privacy officer, who’s actually one of my best allies at Home Depot. Together, we’re working on what that model looks like, to make sure first and foremost that we have privacy aligned. That is our next frontier because I believe at the end of the day our data is one of our biggest assets. What our customers share with us around the projects they do are of high value.
I think brands, including non-endemic brands, will see the value of our data to target their own customers.
The chief privacy officer is one of the ad platform’s ‘best allies’?
Yes!
Having that relationship is extremely important to me. I’m not being sarcastic.
Does Retail Media+ have a non-endemic business right now?
We have non-endemics, but it’s a newer and small part of the business. Suppliers will always be the focus, I’d say.
It’s a growth area because [we want to identify things like] is this person a new homeowner or doing a renovation? These are important segments that are disappearing for brands with third-party audiences.
Retail media networks are exciting right now, but their earnings are a real mystery. Do you disclose ad revenue or any benchmark for Retail Media+?
Retail media network earnings are a mystery at the moment. I’m going to reinforce that for you.
This interview has been edited and condensed.
