- Walmart revealed plans to ramp up its advertising business and compete with ad giants like Amazon and Google.
- The retailer is rebranding its advertising business to Walmart Connect.
- It also plans to roll out its own adtech and ads on in-store screens this year.
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Walmart announced a massive plan to take on Google, Facebook, and Amazon as it seeks to become a top-10 global ad seller.
The retailer said it’s ramping up its pitch for advertisers to invest bigger budgets than advertisers typically put into so-called retail media budgets that brands like Procter & Gamble and Unilever spend with retailers. Instead, Walmart wants to compete with tech giants, TV networks and traditional media companies.
The ambitions are big for Walmart, which has traditionally focused on retail media ad dollars that are spread across a number of retailers. According to a knowledgeable source, Walmart has ambitions to grow its ad revenue by 10x over the next five years.
Read more: How advertising giants like WPP and IPG are building new kinds of businesses to stay relevant as people shop more online
Walmart’s new push into advertising includes:
- A new name for its ad business, Walmart Connect.
- Ad tech tools that will roll out later this year.
- Ads on TV and self checkout areas in Walmart stores.
Walmart is rebranding its advertising business, Walmart Media Group, as Walmart Connect, to signal its new investments into programmatic advertising, data and ad formats in stores like takeovers of TV walls, said Janey Whiteside, Walmart’s EVP and chief customer officer.
Whiteside declined to disclose Walmart’s advertising’s revenue but said that the company doubled its ad revenue and the number of advertisers over the past year. She said it aspires to be one of the US’s 10 biggest ad sellers, naming Amazon, Google, and Hearst as competitors.
“Walmart Connect continues to be an important part of our strategy, which includes diversifying our revenue streams,” she said.
Walmart Media Group made up less than 1% of Walmart’s annual net sales in 2020, according to its 2020 annual report.
Read more: 9 key people at companies like Amazon, Walmart, and Kroger who are making e-commerce advertising into a $17 billion market
Walmart has built its advertising business internally over the past couple of years after splitting with longtime ad agency Triad Retail. More recently, Walmart has shifted to self-service products to appeal to wide group of advertisers, rolling out an API and self-serve platform.
Later this year, Walmart plans to roll out its own tool to let advertisers and agencies buy programmatic ads on non-Walmart properties. Walmart is working with ad tech company The Trade Desk to launch a demand-side platform by the end of the year for holiday campaigns. Janey said that Walmart’s demand-side platform would pull in Walmart’s first-party data about shoppers that advertisers can use to granularly target ads.
Walmart is also rolling out new ad formats in more than 4,000 stores. Advertisers can buy and target ads that cover the walls in stores’ electronic departments and on screens at self checkouts.
Janey said that Walmart plans to incorporate ads into other initiatives like its loyalty program. Walmart rolled out its membership service Walmart Plus last year, which Janey said will be used to gather more data for advertisers. And Walmart’s e-commerce marketplace for third-party merchants lets smaller brands buy ads.
“We’re excited about bringing many self-serve opportunities to third-party sellers and the marketplace,” she said.
To be sure, Walmart will have a tough time competing directly with Amazon and others that dominate digital advertising. E-commerce advertising made $17.4 billion in the US in 2020, with Amazon pulling in $13 billion of ad spend, according to eMarketer.
Other retailers already have their own ad tech. Amazon offers a demand-side platform that competes with The Trade Desk, Google, AT&T’s Xandr, and MediaMath. Retailers like Walgreens, CVS, and Ulta Beauty are also pushing into programmatic advertising to help advertisers reach audiences beyond their own websites.
Jeff Coleman, group VP of marketplace channels at ad agency Tinuiti, said that Walmart’s physical stores set it apart from Amazon.
“One thing we’ve seen with Walmart and others is that as they’re coming online and developing their own advertising platforms, they can tie it back to in-store data,” he said. “You can see how advertising campaigns impacted online sales and sometimes how they impacted in-store sales. Brands have always wanted to understand how online impacts offline.”
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