Albertsons Launching Internal Advertising Business

Albertsons is launching a new internal advertising business. The grocery chain will compete for ad…

  • Albertsons is launching a new internal advertising business.
  • The grocery chain will compete for ad budgets with Walmart, Kroger, Target, and Instacart.
  • Albertsons is looking to differentiate itself with its shopper data and local advertising.

Ad budgets are increasingly moving to retailers and Albertsons wants a bigger piece.

So the grocery giant is cutting ties with longtime adtech firm Quotient by the end of the year to launch a new internal ad business called Albertsons Media Collective. Albertsons said it will begin rolling out campaigns for advertisers in February, while ad campaigns running through Quotient will wind down.

Albertsons is taking its ad business in-house and investing in its own technology and sales group in hopes of growing it faster than a third party can.

The new group is led by SVP of retail media Kristi Argyilan, who formerly led Target’s ad business Roundel before joining Albertsons earlier this year.

Albertsons faces big competition for ad dollars from Kroger, Walmart, Instacart, and Target, which are ahead in rolling out new ad products and tools for advertisers. Argyilan said that Albertsons will use its loyalty program data from 100 million people to differentiate itself. Albertsons will sell local advertising as part of retail media packages, which other grocery chains do not. An ice cream brand, for example, could choose to zap ads at areas with warmer temperatures and turn off ads in cold weather areas.

The size of Albertsons’ data, she said, is on par with Kroger, Walmart, and Target. She declined to say how much Albertsons makes from advertising.

“Retailers have these quality audiences because they’re built off of real people — marketers are looking for data sources that have high fidelity,” she said.

Albertsons developed the ad platform with the retail media platform CitrusAd and the ad agency Merkle but plans to oversee most of the ad business internally as it grows, Argyilan said. 

“It will probably be some sort of mix but we will definitely more skew towards in-housing than where we’ve been in the past,” she said.

To support these ambitions, Argyilan said Albertsons may eventually look for acquisitions, and that it is hiring for product, media planning and sales roles and recruiting from media companies and ad agencies.

Similar to other retail platforms, brands will be able to buy keyword-based ads that appear in search results by department, category, and subcategory of Albertsons’ website as well as the home page. Albertsons will also build a media network that places ads powered by Albertsons’ data on websites outside of Albertsons’ properties. Argyilan said Albertsons will also explore partnerships with connected TV and video companies.

Consumer packaged goods brands make up the bulk of Albertsons’ ad business but Argyilan said that the company also plans to pitch advertisers that don’t sell items within its stores. Retailers like Amazon have long pitched advertisers that don’t sell products on their platform to attract larger ad budgets devoted to branding. In one example, Argyilan said that an automaker could use Albertsons’ data to find people in the market to buy a car or people who travel based on what they buy.

She said Albertsons’ biggest advertisers pull money for retail media ads from national ad spend and shopper marketing budgets and wants to solve challenges like helping marketers measure how much retail media contributes to their overall ad performance.