Home Depot Gets Into Ad Sales

Discussion
Jul 19, 2006
George Anderson

By George Anderson

Call it an opportunity to educate consumers or a means to improve relations with an important retail customer. Whatever you call it, there is little doubt that Home Depot’s decision to sell advertising space on its Web site will provide the company with another revenue stream while offering manufacturers the opportunity to reach a large and targeted audience.

“Advertising on homedepot.com is a new offering in the online landscape,” said Harvey Seegers, president of Home Depot Direct, in a company press release. “Our goal is to allow a few key vendor partners the opportunity to educate millions of home improvement consumers about their distinctive and innovative products.”

One of those vendors is Moen Incorporated. Kelly Atkins, director of marketing at Moen, said, Advertising on homedepot.com gives us the opportunity to highlight features of our new faucets and finishes to The Home Depot customers who are looking to remodel or replace their kitchen or bath fixtures. We see it as just one more way that The Home Depot continues to provide its customers with the information they need.”

According to an information area on the new program, http://www.sendtec.com/thdbrandedmedia/, the Home Depot Web site receives over 10,000 unique monthly visitors and has an email subscriber list of six million. According to Hit Wise, homedepot.com draws the most traffic of any Web site in the Home and Garden category.

Home Depot will provide manufacturers with a number of advertising options to reach consumers including placement on the home page, shop by category, know-how, store finder, rebate center, and weekly promotional emails.

The DIY retailer did not list pricing for its advertising options but said cost would depend on page position, size and cost-per-thousand (CPM) impressions served.

Discussion Questions: What is your reaction to Home Depot’s Web site advertising program for its vendors? Will the
practice of selling ad space to manufacturers become commonplace on retailer Web sites?

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12 Comments on "Home Depot Gets Into Ad Sales"


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Michael Tesler
Guest
Michael Tesler
14 years 7 months ago

No, no, a thousand times no!!!!!! The greatest mistake being made with retail web sites is that too many look at them strictly as profit centers and do not see and measure their value as marketing venues. Crate and Barrel’s site features the same item on its home page that is featured in its store windows, the same colors the same font the same words…it is building brand and synchronizing its efforts so customers understand who they are and receive a Crate and Barrel orchestrated experience in all the channels in which they operate.

Ryan Mathews
Guest
14 years 7 months ago

To me the bottom line is that this was inevitable. I’m in the “what took them so long?” camp.

Bill Robinson
Guest
Bill Robinson
14 years 7 months ago

Home Depot’s on-line ads are very positive development for consumers. I don’t view it is a profit grab. Vendors know far more about their products than the typical home depot employee. The ads will typically highlight the feature and benefits of key items and assortments.

I’ve always felt that vendors are the missing link in retailing where knowledge often must be transferred to the shopper prior to purchase. Hopefully, Home Depot will be able to translate this innovation into more effective store-level service with more point of purchase ads through instant messaging, kiosks, and other new technology.

Barry Wise
Guest
Barry Wise
14 years 7 months ago

I think Home Depot selling advertising on its website is a great idea as long as it’s used to increase sales and to educate their customers. It was discussed in this forum a few days ago about using In-Store Marketing to target customers when they’re in the store, and this example is just another way to “touch” the customer when you have their attention.

Congratulations to Home Depot for being innovative, but hopefully they won’t take it too far and get too enamored with the advertising revenues and forget the customer and what the customer wants. Also, watch out as other retailers rush to take advantage of this idea.

Ben Ball
Guest
14 years 7 months ago

“What took them so long?” is a good response here to be sure. But I do think this is not for every retailer. The Home Depot street cred with its core shopper is huge. That makes it a trusted site for advice for D-I-Y, and therefore a credible environment for the vendor’s ads. Also, the vendor who does “informational ads” with details on why the product excels at specific applications will do best. To that point, I wonder if the ads can be linked to specific consumer searches (i.e. when I search on “portable tools” I get the DeWalt ad)?

Paul Waldron
Guest
Paul Waldron
14 years 7 months ago

I think this is a win-win situation for everyone – the vendors and retailers, and it might even be good for the consumers. Vendors win because they get the opportunity to get their message in front of consumers without the per click charge resulting from a search engine. Retailers win because they can offset the cost of developing and maintaining the website.

Consumers win because they will have links to the vendor’s website for additional information about the full line of products.

With the effectiveness of traditional advertising being questioned, this provides the vendor another venue to get their message in front of a pre-qualified consumer.

Bernie Slome
Guest
Bernie Slome
14 years 7 months ago

What’s the big deal? Is it any different than the Wall Street Journal selling ad space on page-one? Or a sports team selling the naming rights to their stadium? In Home Depot’s case, selling ads is akin to selling end caps within the store. It is a soft dollars revenue source for the retailer and for the vendor it is premium exposure. All that has happened is that Home Depot has taken its brick and mortar marketing strategy and brought it to the online world.

No problem here. Just surprised it has taken retail so long to figure our this revenue stream.

Mark Lilien
Guest
14 years 7 months ago

Home Depot’s online ad sales are a fine way to raise profits. Many retailers spend big bucks on their web sites, so they might as well add to their incomes. I’m not so sure this is very innovative though, since it seems as though a wide range of retailers already sell ads on their web sites, from Amazon to Kmart to Modell’s.

Laura Davis-Taylor
Guest
Laura Davis-Taylor
14 years 7 months ago

Like every other media touchpoint, I just hope that they use the advertiser real estate to add value to the visitor rather than simply pitch products. Due to current technology, there’s a wonderful opportunity to be creative and relevant to the shoppers.

Carol Spieckerman
Guest
14 years 7 months ago

I see it as a win-win within limits. As pointed out previously, allowing advertising on Home Depot’s site gives vendors a rare opportunity to pitch their products to an already-warm consumer and Home Depot can defray the cost of web development. However, Home Depot will need to keep the pop-ups, audio and other sight and sound clutter to a minimum or risk tarnishing their image and blurring their own brand.

Kai Clarke
Guest
14 years 7 months ago

This is an obvious solution to a need from both HD and the vendors. This allows HD vendors to impact their presence on a good website while giving HD a unique revenue stream. This only makes sense that HD should look at their online capabilities as a revenue stream. Soon enough they will be offering in-store advertising, aisle advertising (like the grocery stores), cart advertising, etc. This would only be smart business, good marketing and the right thing to do!

Camille P. Schuster, PhD.
Guest
14 years 7 months ago

With increased shopping on the Internet and the increase in the amount of advertising on the Web, why shouldn’t Home Depot have ads on their website?

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