June 16, 2024

KT Business

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Walmart ad sales pop as more brands buy into retail media

3 min read

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Table of Contents

Dive Brief:

  • Walmart’s U.S. advertising business, Walmart Connect, grew by 26% during the first quarter of the company’s fiscal 2025, according to an earnings statement. Its global advertising business was up 24% year over year.

  • Overall active advertiser counts on Connect increased by nearly 19% during the period, executives said on a call discussing the results. Growth from marketplace sellers, or smaller and emerging brands that sell through Walmart, was up more than 50%.

  • Walmart’s advertising foothold, particularly in video, is set to further expand in the months ahead following its acquisition of smart TV manufacturer Vizio and a new streaming agreement with Disney.

Dive Insight:

Walmart extended a winning streak on the ad sales front last quarter as a stream of new advertisers joined its retail media offerings, including a large number of marketplace sellers on Connect in the U.S. and a 30% increase in active advertisers on Sam’s Club. Getting smaller sellers to buy more ads has been a priority for Walmart and contributes to the big-box store’s goal of creating a one-stop ecosystem, where merchants tailor their campaigns using first-party sales data to then drive more purchases via Walmart-owned platforms.

Strengths in advertising were echoed in other digital channels in an earnings report that generally impressed investors. Walmart’s e-commerce sales climbed 22% YoY in Q1, a bump attributed to store-fulfilled pickup and delivery as well as marketplace gains. Walmart slightly raised its full-year guidance, expecting net sales growth between 3% to 4%.

Walmart’s ad segment has been on an upward trajectory as consumer packaged goods brands dump more spending into retail media, digital marketing’s fastest-growing channel. Retail media growth has been fueled by a demand for alternatives to third-party cookies and also network owners’ improved sophistication in key areas like measurement and programmatic buying.

Winning more dollars from non-endemic brands, or businesses that don’t typically sell through Walmart, like automotive and financial services marketers, is also top of the agenda for Connect this year, and the network has made several moves to shore up its appeal.

Walmart is looking to go toe-to-toe with heavyweights like Amazon through its recent acquisition of Vizio for $2.3 billion. The deal brings over the smart TV maker’s advertising solutions and over 500 direct brand relationships. Vizio is also known for wielding a valuable data set that helps track what viewers are watching, which will now sit behind Walmart’s walled garden. Investors did not ask about the acquisition’s impact on Walmart’s advertising plans.

The retailer is also pushing further into streaming, an increasingly competitive battleground for retail media networks that want to prove they can drive performance beyond sponsored product and display listings on their own websites. Walmart earlier in May inked a pact with Disney that will leverage Connect’s first-party data to better target and measure campaigns running on platforms like Disney+ and Hulu.

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