Bringing It All In-house At Nordstrom

Michelle Alfaro, senior manager, programmatic display advertising, Nordstrom, with Steve Smith, MediaPost VP, editorial director of events as interviewer.

For at least the full-price business, digital programmatic media is a healthy portion of what we’re doing. From promoted branded content to programmatic, we now have a happy balance.

We want a consistent mix. We haven’t done TV since 1999. Digital marketing has been a constant component since 2008. The team focuses on video, display and social. There’s not a lot of video content; we are wading into it. We are 50/50 display and paid social, we’re testing our budget in video, which has been growing since the last Q4.

We have a full funnel mix, which is why we made the move to bring it in-house, to control branding message. And we do that with known customers but also with acquisition customers.

Q: What are the drivers to bringing it in-house?

We have to be true to the customer journey, thinking about customer first drove decision to flip marketing a little more in-house. Transparency in technology from audience list to execution, knowing we have a bit of online to offline hurdle, not so easy to do with an agency.

It’s the crux of why we decided to revamp. Privacy and partnerships we want to keep close to vest, have more control over who we were deploying messaging to and what channels. Everybody thinks full control means you get a complete prescriptive way to sequential messaging, but no one is there yet.

We get to control a little bit more around privacy and then customization, able to balance between AI and knowing your best customer. 

Q: What do you know now about your customer that you didn’t know then?

We’ve been on a journey ourselves in figuring out our customer journey. We had disparate data sources. I’m sure there’s a slide in our archives of all the different databases and what we collected. has more disparate data than personal stylists that work with customer. We’re trying to digitize the in-store data.

We’re looking at who are our best customers and what’s similar about them. We’ve come a long way in understanding who our five core audience segments are. 

Q: How are you understanding the why of your customer? Data is not human, it’s not life. 

Between where we were previously and where we are now, there were all the messy steps. We were doing 300 to 600 campaigns a year, it was hectic and messy, to target different categories, etc., and who gets that message? Trying to understand why a customer would be intrigued by a brand launch was part of it. Why folks are motivated to come shop with us. People who are buying mens’ products aren’t actually men. Gifting relationship and household relationship have a lot of whys. We have to craft the right story for each of our customer segments.

Q: How and where did you decide how you reduced the number of campaigns.

Our brand team really has been driver of content. The five core customer segments, and prioritizing products has reduced the number of campaigns, all five can go under one umbrella with different messages. It reduced the need for all that production cost, specific outlining per product. What else would they be interested in that we can customize personalize for them. The AI helped enabled some of that. Who the core is, new customers are?

Q: Where did all that data, how it’s organized internally, processed, who ended up owning that?

We have a group dedicated to marketing tech, they championed and led the way, cleaning up what we have access to from a marketing perspective. 

Q: How did you decide, Do I want to bring all this in-house?

We used the RFP process to understand agency partnerships, how to handle and manage data, in a couple of partnerships we leveraged, tested out, and deployed. We had a big hurdle in 2015 where we started asking what a DMP was proposed to do and what you can do beyond programmatic display has helped us change the work and the ability to find the folks who can provide those things. 

Flexibility is a big part of what we were looking at. Ability to work with folks to solve pieces of puzzle. We built it ourselves, being in Seattle, we have folks who have experience with other tech companies. Minimal viable product versus ideal state. 

Having a dedicated marketing tech group gives us dedicated resource, to prioritize my asks vs paid search’s asks. What is the speed to implement, cost to implement, groundwork and grunt work of bandwidth and prioritize against each other. 

1 comment about "Bringing It All In-house At Nordstrom".
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  1. Michael Palmgren from OH Partners, August 23, 2018 at 5:27 p.m.

    Wow... As someone who has worked a lot on New Biz over the past couple of decades, it hurts me to see they deliberately used the RFP process to gain enough knowledge to bring it in-house.  New Biz costs agencies a lot of money and effort and often diverts premium talent away from existing client work. 

    I know this is not an article on the agency RFP process, but reading this reminds me of why I think there needs to be real reform in this area. 

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