Dive Brief:
- Macy's has selected Spark Foundry, a division of Publicis Groupe, and Publicis Media's Digitas to handle its media account after a closed review, Ad Age reported.
- Publicis Groupe was chosen for its data-driven solutions to help Macy's drive growth. The retailer spent $415.4 million on measured media in the U.S. in 2017, according to Kantar Media data cited in the report.
- Dentsu Aegis Network's Carat was the incumbent agency, selected during a 2012 review.
Dive Insight:
Macy's has been exploring new digital initiatives, and selecting a media agency like Spark Foundry is in line with that strategy. The move is likely to also support a bigger commitment to letting data drive the retailer's media planning and buying strategies, something more marketers are embracing. By 2019, 67% of all display ads are forecast to be programmatic, reaching $84.9 billion, according to Publicis Groupe Zenith. However, many major brands are handling parts or all of their programmatic ad buys in-house.
The Macy's media account is the latest big win for Publicis Groupe, which appears to be faring better than WPP, another ad holding company. WPP has had a run of bad luck of late following the departure of its long-time CEO Martin Sorrell. In March, Marriott announced plans to consolidate its paid media business under Publicis Groupe, moving it away from WPP's Wavemaker. The hotel chain also cited the desire to be more data-driven and tech-focused as its reason for moving the account. Publicis is leveraging its "Power of One" model, which merges agencies and services from across the company, to appeal to brands.
As brick-and-mortar retailers continue to struggle with falling sales, store closings and bankruptcies, Macy's focus on digital strategies is proving to be a boon. For Q1, Macy’s saw its revenue rise 4.2% from last year.
During its earnings call to discuss the Q1 results earlier this month, Macy's said that it had expanded tests of mobile checkout and product displays using augmented reality (AR) and virtual reality (VR). A pilot using VR in its furniture stores "significantly increased" transaction sizes and reduced returns, a company executive said during a conference call about the earnings. The company plans to add the feature to more stores this year and expand its Scan, Pay, Go mobile checkout to all stores by the end of 2018, after a successful pilot.
