Macy’s Is Making a Play for Ad Dollars From Big Brands

Macy’s wants a piece of ad budgets from brands that don’t sell its items at Macy’s.

Macy’s Media Network—the department store’s advertising arm—has partnered with ecommerce firm Rokt to serve targeted ads to Macy’s shoppers. On Macys.com, shoppers may see offers on the confirmation page after placing an order. For example, someone who buys an engagement ring on Macy’s website could see an ad for a travel company related to planning a honeymoon.

Rokt uses AI to show shoppers personalized offers on retailers’ websites using data tied to a transaction like a shopper’s ZIP code, email address, and type of credit card. Rokt claims to reach 42 million US shoppers and works with brands including Live Nation, Hulu, Uber, and HelloFresh.

Macy’s began testing Rokt’s technology last year and has now fully rolled it out. Part of the appeal of the pitch is that Rokt sells ads to non-endemic advertisers—brands that don’t sell its items on Macys.com—said Michael Krans, vice president of Macy’s Media Network.

“This is our way to deliver non-endemic offers and messages to our customers,” he told ADWEEK.

Krans said that Macy’s doesn’t allow non-endemic advertisers to buy standard ads on its website like search and display formats. Macy’s also has a partnership with adtech firm The Trade Desk that allows non-endemic advertisers to target ads across the web using Macy’s data.

Non-endemic advertising is a growth area for retailers. These advertisers typically have bigger budgets that come from digital and national budgets. So-called endemic brands that sell products with retailers typically fund retail media from smaller shopper marketing budgets.

Macy’s Media Network reported $37 million during the first quarter of its fiscal 2024 year, up $8 million from the year prior.

AI-targeted ads

Elizabeth Buchanan, chief commercial Officer at Rokt, said that the firm’s technology is only used to show offers to people who have placed items in their carts. That means Rokt doesn’t compete with other adtech firms that sell search, display, and offsite ads for retailers, she said.

Rokt can also tailor the offers that shoppers see based on their behavior. Buchanan said Rokt’s engagement rates range from five to 15 percent, higher than standard click-through rates.

“In just one or two messages, you can double the profitability of that customer,” she said. “We help match the right upsell, the right offer [and] the right message.”

Sometimes that means not showing any offers to shoppers, she said. For example, if a repeat shopper continuously does not click on ads, Rokt can suppress ads from being shown to that person. 

In one example of how Macy’s is working with Rokt, Macy’s tested text-only ads that had higher engagement than ads featuring images or brand logos, said Macy Media Network’s Krans.

Macy’s is also working on ways to use Rokt’s technology to promote Macy’s credit card as a payment option on Macys.com. 

“They’re able to read our first-party, customer data and they’re able to make a decision in real-time that a customer is most apt to act on based on past browsing behaviors,” he said.