From selling appliances to selling data plans: Best Buy Co., Inc. (BBY.US) advertising business becomes a new growth engine, with a value expected to exceed $1 billion by 2030.

The advertising platform of Best Buy Co., Inc. (BBY.US) is considered by analysts as an important asset for the retailer, and investors should pay close attention to it. "Best Buy Co., Inc. Advertising" was established in 2022 as an in-house media company aimed at helping brands reach millions of consumers interested in technology through data-driven multi-channel marketing activities. In short, the platform allows advertisers to connect with audiences online, offline, and through Best Buy Co., Inc.'s mobile applications, using insights generated from 10 billion annual website views, 65 million transactions, and a customer base of 200 million. The retailer emphasizes that deep data integration enables over 93% of transactions to be associated with customer IDs, resulting in very accurate measurement of marketing activities and return on investment calculations. Advertisers can purchase attractive ad spaces, such as the store's "full-screen display" service. By placing screens at entrances, TV walls, checkout points, and pick-up areas, they can make their brands stand out in Best Buy Co., Inc.'s physical stores. This immersive experience is now also applicable to non-electronic product brands, such as financial services companies, aiming to reach peripheral consumers who shop in technology-driven retail environments. Jefferies Financial Group Inc. analyst Joseph Matuszewski believes that Best Buy Co., Inc.'s advertising business has become an increasingly important source of revenue for the company. He emphasizes, "We expect that over the next 5 years and beyond, the impact of Best Buy Co., Inc.'s advertising business on the company's profit and loss statement will continue to strengthen, and its contribution to annual gross margin will exceed investors' expectations of contraction." Importantly, Matuszewski believes that investors may be overlooking the potential benefits of this alternative revenue stream. Jefferies Financial Group Inc. estimates that Best Buy Co., Inc.'s advertising platform will generate over $250 million in profit this year, and expects that by 2030, Best Buy Co., Inc.'s advertising will create over $1 billion in value, with a $600 million pre-tax profit flow contributing to over 20% of Best Buy Co., Inc.'s overall operating profit.