The CVS Media Exchange (CMX), CVS Pharmacy’s new ad network, launched in August. But it was in the works before COVID-19 hit.
The pandemic makes for interesting timing, though.
“Ecommerce and omnichannel shopping were already on the rise,” said Erin Condon, VP of front store and omnichannel marketing at CVS Health. “But in a post-COVID world, there’s been an acceleration so that all demographics are engaging more with digital media platforms and digital fulfillment mechanisms.”
Here are the top six things you should know about CMX.
1. The vision
The idea behind CMX is to help advertisers and suppliers reach CVS customers when they’re in the shopping mood – which isn’t all that different from what CVS has been doing for years through more traditional means, such as direct mail.
“We’re just increasing our investment and advancing our focus on marketing technology to further personalize our engagements with our customers in even more of the channels that she’s consuming more of, whether she’s choosing to shop online or in store,” Condon said. “We’re continually looking for new channels that can give us a return on performance data.”
2. The channels
CMX allows advertisers to target ads across channels informed by CVS customer data. The platform can be used to serve off-site programmatic display, online video, search and social ads, banner ads on CVS.com and in-store placements within CVS locations.
Roughly 76% of the US population lives within five miles of a physical CVS store, and CVS Pharmacy, the retail division of CVS Health, has nearly 10,000 brick-and-mortar locations.
3. The data
CVS has access to decades worth of data from its loyalty program, ExtraCare, which “our customers allow us to use, because of the value exchange for them,” Condon said.
CPG companies often have trouble building a well-rounded view of their customers, she said.
But CVS purchase history data combined with digital engagements on and off of CVS properties and other interest-based data helps build out the gaps in their knowledge, she said.
4. The service
CMX is available as a managed service. CVS works with its clients to build audiences for campaigns and set the KPIs up front.
“And then we’re hands on keyboards to execute those campaigns,” Condon said.
Members of CVS’ analytics team provide in-flight reporting about what ads were served at what cadence and handle any optimization that needs to happen mid-flight. There’s also a dashboard with that information on the backend so that suppliers can track their return on investment on their own if they want to.
5. The measurement
Brands can measure the effectiveness of their campaigns through a closed-loop system, which CVS can credibly claim to offer based on its large brick-and-mortar footprint. CMX customers can also track brand sales lift, brand health metrics and new buyer growth.
“Our CPG partners want to understand who the buyer is, but that’s about more than just counting the number of sales or trips related to a given advertisement,” Condon said. “They want to know how many customers are new to a category, how many customers either have or haven’t bought their brand or that category before – important information if you want to understand the long-term value of media.”
CVS is also looking to further develop its A/B testing capabilities, Condon said.
6. The pricing
Ad pricing is tailored based on how much hand-holding a brand needs to create its audiences and media plan, and whether they require help with the creative. CMX offers a full creative support option. Pricing is also dependent on the level and depth of the analytics a brand wants.
“It’s all custom,” Condon said. “We work with our suppliers to meet their objectives and their budget and we make sure that their budget is sufficient to meet the objectives. One thing we don’t want to do is say that we can achieve something if it’s not possible based on the level of reach we’d have for a given budget.”
Smells like shopper marketing
CVS isn’t the only retailer that spies digital advertising as a major opportunity. Retailers are realizing that their first-party data is extremely attractive to brands.
Walmart recently launched a self-serve ad platform and an ads API marketing partner program; Kroger has had a self-serve platform called Kroger Precision Marketing since 2017; Target has its own media network (rebranded to Roundel last year), and even Home Depot is getting in on the action with a homegrown suite of advertiser solutions called Retail Media Plus.
Most retailers are motivated, at least in part, by Amazon’s breath on the back of their necks.
According to a recent survey from Merkle, 95% of CPGs spend shopper marketing dollars on Amazon regardless of whether they sell through the platform directly.
But CVS Health’s focus on wellness and pharmacy brands is a differentiator.
“Kudos to Amazon for building a very successful business, but we’re focused on the customer and our mission of helping people on the path to better health,” Condon said. “We’ve been at this for a very long time and we have a national footprint of thousands of stores that puts us in a unique position to be a local community healthcare provider.”