Need to Know
- The retailer is rebranding its advertising business from Walmart Media Group to Walmart Connect.
- Walmart aims to increase its ad revenue by ten times over the next five years, in part by selling ads that will display on TV and self-checkout areas in Walmart’s physical stores.
- Advertisers will also soon be able to buy programmatic ads on non-Walmart properties and will leverage data from its loyalty program, Walmart+, to better appeal to advertisers and agencies.
Walmart is scaling up its ad offerings, planning to roll out a number of new services that the company hopes will make it one of the world’s top ad sellers.
In a blog post published on January 28, Walmart revealed that it had rebranded its advertising business, formerly known as Walmart Media Group, to Walmart Connect. Walmart Connect will begin offering more options for advertisers to utilize its native properties, such as Walmart.com, and the Walmart app.
The store will now be allowing advertisers to purchase space on screens at self-checkout and TV displays within stores, effectively adding nearly 170,000 digital screens across 4,500+ stores to its buyable ad space. Advertisers will be able to display a product “right next to where customers are making purchasing decisions,” in other words, according to the blog post. Walmart is already having substantial success in this arena, with the company doubling its ad revenue in the last fiscal year; the company aims to increase its ad revenue tenfold over the next five years.
“Walmart has always connected customers and the great brands they love, and now we have the ability to offer an easy-to-use platform to enhance those connections at scale,” said Janey Whiteside, chief customer officer for Walmart. “We’ve built a substantial business that can serve clients in a way no one else can—as a closed-loop omnichannel media company. By expanding our offerings we’re creating measurable value for our partners and customers alike in our ecosystem and beyond.”
Walmart Connect will also leverage data from Walmart+, the retailer’s loyalty program, which it launched last year, to better serve advertisers and agencies. The company also announced a partnership with The Trade Desk to launch a demand-side platform for suppliers and their media and ad agencies which will launch closer to the 2021 holiday-shopping season.
While Walmart may struggle to achieve the advertising revenue benchmarks set by juggernauts such as Amazon, whose ad revenue for 2020 hit $13 billion, the big-box chain has the advantage of physical stores in which it can offer advertising opportunities that digital-only retailers such as Amazon cannot. Walmart is also a major investor in TikTok, giving it access to a huge, young, digital-savvy audience, which it can likely leverage to advertisers.
However, in addition to larger players such as Amazon, Walmart is competing with a number of individual retailers and businesses that have launched self-serve advertising offerings in the last year. These include Walgreen’s which, like Walmart, allows advertisers to use in-store display screens for advertising, and can leverage data from its hundreds of thousands of loyalty program members. Instacart, the grocery delivery company, now allows brands to pay for promoted results within its platform, as well.
While Walmart’s digital-first innovations over the last year have largely been customer-focused, the retailer has also entered into a number of strategic partnerships aimed at attracting new brands and advertisers. Chief among these has been a partnership with Shopify, which allowed Walmart’s third-party marketplace, which it launched in July 2019, to double in size in a year.