Albertsons is going to help companies test just how effective their digital ads are

Key Points
  • Albertsons is launching a service for consumer brands to track the real impact of online ads.
  • The grocer has signed up more than 60 consumer companies for the program.
  • The initiative comes as Albertsons doubles down on its digital efforts, including the acquisition of Plated and its partnership with Instacart.
A shopper in an Albertsons in Fullerton, California.
Irfan Khan | Los Angeles Times | Getty Image

Albertsons is looking to partner with consumer brands with a new service aimed at improving their digital advertising.

The owner of Safeway and Shaw's is launching a new initiative with Quotient Technology to provide feedback on the impact of brands' digital ads on sales in Albertsons stores. The platform, Albertsons Performance Media, will use shopping data to help brands better target their ads.

Those promotions will be placed across all sites and apps where digital ads are served and will not be restricted to pages relating to Albertsons.

The move comes as consumer companies and retailers alike are seeking ways to reach shoppers outside store walls. Meantime, Amazon's acquisition of Whole Foods has created the potential to combine data and grocery shopping in a way the industry has not yet seen.

Still, with change comes uncertainty, and it is not always clear which digital advertisements are effective. Procter & Gamble famously cut $140 million in digital advertising with little material impact on sales.

Still, Narayan Iyengar, senior vice president of digital and e-commerce at Albertsons, said the company's new offering stands apart by its ability to get direct feedback on whether digital ads are working.

"Time spent on screen is not going away, ... and it stands to reason you want to reach your customer where they are," Iyengar said.

"The biggest problem has always been how do you measure and how do you attribute sales to additional ads. With this data measurement, you can be way more effective with your digital spend."

Albertsons, which has been piloting the efforts with major brands, says return on the investment so far has proven three times the average of similar efforts. It has signed up more than 60 consumer companies for the program.

More broadly, the program comes as Albertsons pushes further into digital and e-commerce. Last summer, it acquired meal kit company Plated, which it has been introducing to Albertsons stores. It has also been expanding its partnership with delivery service Instacart, with plans to roll out the service to 1,800 stores across the country by mid-March.

The backdrop of those efforts, of course, come as Amazon pushes further into grocery, propelled by its acquisition of Whole Foods. The online retail giant launched its automated grocery store earlier this month.

Albertsons was formed by private equity firm Cerberus and a consortium of investors in 2006. It merged with the grocer Safeway in 2015.