Best Buy’s advertising capabilities are set to help power a streaming platform.
The news: Best Buy will provide its first-party advertising data to Roku for targeting and closed loop measurement. It means Best Buy’s year-old retail media network is now powering advertising beyond its own platform.
How it works: Best Buy and Roku said the goal is to make TV advertising “more relevant and performance-driven.”
The partners will provide targeting, optimization and measurement of ads on Roku that use shopper data from Best Buy. As a retailer, Best Buy has access to first party data at the purchase level, which can provide details about a shopper that signals their intent to buy certain products. That’s valuable to advertisers, who want to reach the consumers that are most likely to buy a product.
Not just ads: This is part of a wider partnership that will also feature a prominent place for Roku-branded TVs at Best Buy. This week,tThe two companies are partnering on an interactive popup at SXSW in Austin.
Key quote: “Our goal is to create a better TV experience for everyone,” saidJulian Mintz, co-head of U.S. brand sales for Roku Media. “We’re bringing together our entire business to build the future of entertainment and advertising — making the TV experience simpler, offering the right marketing, data, tech, and scale to drive real results, and helping win the entire streamer’s journey together with Best Buy.”
What it means for retail media:
Activating consumer electronics: While retail media is often considered the province of major CPG brands or Amazon sellers, consumer electronics are playing an outsize role in the early growth of this format. According to MediaRadar, this category accounted for 15% of retail media spend in 2022, leading all categories. That helps explain why Roku wants to add Best Buy’s data to the mix: Understanding intent in one of the most popular advertising categories can help better reach shoppers with those products.
Going offsite: The partnership shows how retail media is extending beyond retailers’ own marketplaces. The first-party data being used by Roku is a valuable asset to the streaming platform’s advertising effectiveness. First-party data has been understood to operate within a “walled garden,” where data owned by a retailer can only be used in their store. This partnership shows how technology is quickly climbing over that barrier. Importantly, brands and platforms will have to keep privacy in mind as more of these partnerships take hold.
Consider privacy: One major catalyst for the growth of retail media was privacy-oriented changes to third party tools, notably the Apple App Tracking Transparency changes that dealt a blow to Facebook's vaunted attribution engine. To become a lasting marketing channel, retail media can’t simply repeat the same tactics that brought so much scrutiny in the past, or recent history indicates it will repeat the same fate as advertising on the open internet.
Streaming ahead: Roku’s involvement underscores a key growth area for advertising: Streaming platforms. Called Connected TV, or CTV, streaming offers a form of TV advertising that reaches people while they are on their couch and passively watching content in a pastime that is familiar to most Americans, while also bringing in the targeting and measurement capabilities of the internet. Best Buy’s partnership with Roku shows that there is room not only for retailers to advertise products in that equation, but also to leverage data that is at the heart of a whole new business model.
Further reading: Roku has been on the forefront of combining commerce and media. It has also recently partnered with Walmart and DoorDash to create shoppable ads that allow consumers to order items using their remote.
