The Supply Side: Sam’s Club leaning into media advertising business

Taking a cue from its parent Walmart Inc., which has shown retail media can boost the bottom line, Sam’s Club execs said their top priority is member experience. Still, ad revenue also has the potential to increase net income.

Austin Leonard, head of sales for MAP, which is Sam’s Club’s newest advertising program, said ad revenue has grown 50% in the past year since the relaunch of MAP, or Member Access Platform, last June. He said MAP’s mission is to provide members with the most valuable ad experience while also growing revenue for Sam’s Club. The retailer chose not to disclose any dollar value associated with MAP.

Leonard said there are two areas that set MAP apart from previous offerings. MAP launched an intelligent retargeting feature that eliminates irrelevant ads from being shown to customers who have already purchased the item. He said the member has a better experience, and advertisers can use their budgets more efficiently by not targeting members no longer in the market for their products.

Sam’s Club said it’s working with The Trade Desk and LiveRamp (RAMP) to leverage member data unique to the retailer, advertiser data and artificial intelligence (AI)-powered, real-time behavioral insights from Sam’s Club to make advertising campaigns more innovative, effective and personalized. Leonard said advertisers have long wanted to optimize retargeting but often bombarded consumers with repetitive or irrelevant ads due to inaccurate and incomplete data.

MAP uses real-time, accurate data from registered Sam’s Club members, including exact data on purchase history, demographics, recent purchases of similar items and basket size. The data is not available on other retail media platforms.

“Advertisers are now able to target based on what we know members are in the market for right now. We can stop serving these members ads once they complete their purchase at any Sam’s Club or on any device,” Leonard said.

He said suppliers are also happy with the retargeting feature. Mic Zavarella, vice president of marketing at PepsiCo, said the retargeting feature with MAP allows the brand to “automate targeting, personalizing messaging and creating sophisticated media workflows that maximize our campaigns.”

Leonard said MAP’s retargeting feature delivers tangible results and incremental return on ad spend because it connects ads to membership data and behavior in real time. He said MAP could give advertisers a variety of retargeting data.

“Retargeting is a tried and true tactic for Nestlé Purina in the e-commerce and digital media world. We’re excited to see the power of omnichannel data come to retargeting that can drive both performance and brand awareness at scale,” said Tony DiMattia, director and head of shopper marketing at Nestlé Purina.

Sam’s Club CEO Kath McLay recently told analysts that MAP spend is growing in sync with the retailer’s omnichannel business that can start with an online order for club pickup, often from a mobile phone and then end with Scan & Go purchases made inside the club through the mobile app.

She said 12% of Sam’s total sales are online for ship-to-home, and 25% of members regularly use the Scan & Go feature inside clubs with their phones. McLay said that as more members use mobile devices to browse and make purchases from Sam’s Club, there is an opportunity for deeper engagement to enhance the user experience further.

In March, MAP also introduced an ad attribution solution for advertisers to tie in-club purchases to digital search ads. It uses real-time, first-party data to see each ad’s revenue across the omni spectrum. This innovation makes Sam’s Club MAP among the first retail media platforms connecting search and sponsored product ads to offline sales.

“Sam’s Club MAP is opening up a new era of transparency and efficiency in advertising. Now, because of our unique knowledge of our members, we’re able to offer true closed-loop attribution for both online and offline sales. This gives advertisers visibility into the results of their search and sponsored product campaigns at a time when they need to make fewer resources go further,” said Lex Josephs, general manager of Sam’s Club MAP.

Josephs said that because of the real-time nature of consumer search, advertisers have had challenges attributing sales to specific campaigns. In-store attribution was complicated.

He said other retailers might offer offline reporting metrics, but they rely on loyalty card purchases or panel data, which are estimates that do not include all consumer purchase behavior.

Sam’s Club said the attribution innovation leads to a higher return on ad spend (ROAS) and increased sales in an omnichannel way. Sam’s said its MAP advertisers had averaged nearly a 30% increase in average ROAS since adding in-club sales to their attribution mix.

“A huge group of our members sees a search ad online or on their phone when shopping but purchase the product in-club. Previously, our advertisers couldn’t connect the in-club purchase to their online ads to know what drove sales. With our new attribution model, advertisers can understand what’s motivating purchases across all channels accurately, especially for search ads,” Tim Simmons, chief product officer at Sam’s Club, said during a recent media tour.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.