Best Buy expands advertising business, launches Best Buy Ads

Best Buy 's sales have surged over the past year as people spend more on technology and electronics . Now the retailer is betting bigger on another revenue source : advertising .

Best Buy’s launch of Best Buy Ads is an updated version of its in-house media business, designed to provide more services for brands looking to connect with shoppers. The company ’s advertising business is expected to grow 31.4% to $41.37 billion by 2022 , according to eMarketer estimates .

Keith Bryan, president of Best Buy advertising , said the company has 3 billion interactions with customers each year , which gives it a rich base of data that helps connect brands with consumers.

The pandemic-driven surge in e-commerce over the past two years has also provided Best Buy with valuable information about shoppers’ preferences : In the most recent quarter, online sales accounted for nearly a third of Best Buy’s $11 billion in total U.S. revenue.

Although Best Buy's online sales in the U.S. market fell 12.5% ​​year-on-year to $10.5 billion in the first three quarters of 2021 , its e-commerce grew 191.4% to $12 billion in the first three quarters of 2020 compared with the same period in 2019 .

In addition to its own media properties, Best Buy can also advertise on external publisher sites , and brands that want to advertise with the retailer are not required to sell their products or services through the company.

As online platforms come under increasing scrutiny over data privacy, the demise of third - party cookies has created conditions for the development of retail media networks . Retailers including CVS , Target and Instacart have seen the opportunity .

Kroger 's retail media division, Precision Marketing, launched in October 2017, generated $ 150 million in operating profit for the company and saw revenue grow 135% in 2020.

Walmart Media Group also changed its name to Walmart Connect last year and partnered with ad technology company The Trade Desk to expand its reach beyond the retailer's native channels.

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