The trend of retailers like home improvement giant Home Depot (HD) starting their own media network is on the rise, and not without reason. After all, shoppers in a store are a captive audience looking for a certain kind of product, so advertising that product in-store is a great way to narrow the gap between ad contact and purchase. Home Depot, meanwhile, is stepping up its own media network operations with a new partnership, and investors were reasonably pleased with this comparatively simple move. Shares were up modestly in Friday afternoon’s trading.
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Home Depot got together with Yahoo, now mostly owned by Apollo Global Management (APO), to help bolster the range of advertisers that can get in on the Orange Apron Media network, Home Depot’s own media network. Home Depot has had a media network since 2018, reports noted, but it has only been Orange Apron since March 2024. In fact, current reports suggest that Orange Apron is the largest home improvement operation of its class.
Recently, Home Depot branched out its media operations, looking to get products that do not necessarily sell within the retailer itself, but are adjacent. So instead of looking only at advertisers that sell tools or patio furniture, Home Depot is also taking ads from home security services or insurance providers. And the partnership with Yahoo opens up access to Yahoo ConnectID, a Demand Side Platform (DSP) that allows for better matching between users and potential products.
Still a Leader
Word from the Numerator Home Improvement Tracker report, which we have heard from previously, says that Home Depot is still a powerhouse in the market. In fact, Home Depot has 28% of the market to itself. The next highest portion of that market is Lowe’s (LOW), which comes in at 18%.
As for what shoppers at Home Depot are most in the market for, the leader is home improvement power tools, followed closely by outdoor power equipment like lawn mowers. Despite the sheer number of options in this field, the fact that Home Depot has as much of the market as it does suggests that it offers a unique experience that keeps shoppers coming back.
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HD stock based on 18 Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 3.4% rally in its share price over the past year, the average HD price target of $428.12 per share implies 15% upside potential.