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It’s apparently never too late to launch a retail media network — at least that’s the approach Ace Hardware has taken. Last week, the hardware chain launched RedVest Media — its retail media network offering onsite search ads, display ads, in-store signage, email and push messaging as well as offsite programmatic.
RedVest Media joins the long list of retail media networks that’s been mounting over the last five years, including other hardware retailers like Home Depot’s Orange Media and Lowe’s Media Network.
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Ace is hoping for a late-mover advantage, said Molly Hjelm, corporate vp of retail media at Ace Hardware. Advertisers are already familiar with RMNs and have solidified them as a budget line item in budgets (although it’s not always clear what teams oversee spend).
“We’ve got these other entities that have pioneered this. To be a late mover means we’re not creating the marketplace for this,” Hjelm told Digiday, later adding, “So we’re able to accelerate that path pretty quickly.”
Late-mover advantage
And there certainly are growing pains. Advertisers have long since lamented over things like fragmentation and walled gardens, diminishing returns on incremental return on ad spend, off-site inventory quality, transparency and measurement.
To get ahead of measurement woes, Ace’s RMN is powered through Epsilon’s DSP, plugging into its standardized measurement system. Other parts of RedVest Media’s tech stack include Pacvue, Flywheel, and Skai to make it a plug and play for different advertisers.
“Plugging into that really mitigates drop off and passing through audiences, allows for consistency, and just allows our partners to benefit from the best UX out there,” Hjelm said. She added, “Ace isn’t homegrowing anything.”
The new ad network is also launching with managed and self-service options and access to real-time performance dashboards to track both onsite and offsite campaign impacts.
Pressure to find new revenue streams
Retail media is big business, expected to account for more than $74 billion in U.S. ad spend next year, according to eMarketer. Big box retailers like Walmart and Target have been cashing in with their ad businesses as bright spots in an otherwise gloomy economic forecast.
“From a business perspective, there’s a lot of pressure within those organizations to find new revenue streams, and this is just a natural one,” said Leah Sallen, managing director of commerce media at VML, a creative agency. “They have the opportunity and want a piece of that pie.”
The challenge for Ace will be unlocking ad spend, especially since so much spend is dedicated to big box retailers as part of joint business plans negotiations. The other challenge is getting on advertisers’ radars, who have already started consolidating their spend to focus on core RMNs. At least at VML, clients have always-on spend for major RMNs, tapping longer tail players for campaign specific initiatives.
“Mostly on the commerce side, most of our clients’ hands are pretty tight just in having to spend with that retailer as part of that relationship,” Sallen said. “They’d all be curious and want to. I just don’t know that they can flex into that at least right now.”
So far, Ace is negotiating with “big paint and adhesive partners” as well as “big power partners,” Hjelm said, declining to name specific brands. The retailer’s focus on endemic advertisers with the first RedVest Media campaign is expected to go live in October, per the vp.
Ace’s pitch is its scale with a 5,100 store footprint, a loyalty program, 60 million reachable digital profiles, and 50 million monthly site visits. Ace Hardware is also banking on its specialty status to attract advertisers and is offering initial advertisers incentives, such as discounts and opportunities to provide feedback as part of an RMN council, per Hjelm.
“For us at launch, it’s not so much about forcing an either or, or trying to rival some of the leading players,” she said, later adding, “The focus is more right now our endemic vendor community helping them understand this new toolkit.”
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