Walmart outlines plan to grow ad business

Walmart Inc.’s U.S. advertising business will focus on innovation and automation as it aims to become a leading platform for advertisers this year.

Walmart Connect, formerly known as Walmart Media Group, is the US arm of Walmart’s global advertising business. Walmart joined the agency in 2019.

The company said the digital ad agency offers advertisers access to Walmart shopper shopping trends and habits, as well as its own ad targeting and measurement platform.

The number of advertisers using Walmart Connect grew more than 130% year-over-year in fiscal 2022, Walmart said in an earnings report recently.

“Understanding customer demand and needs is a critical part of any retail offering,” said Seth Dallaire, chief revenue officer, Walmart US. “The more we know about our customers’ behaviors, the more we can anticipate their needs and our corresponding services and offerings.

“At Walmart Connect,” Dallaire said, “we are focused on using our customer intelligence signals to help advertisers reach customers in ways that deliver value to them.”

Rich Lehrfeld, senior vice president and general manager of Walmart Connect, described in a March 30 blog post what the agency will focus on this year in its drive to become a leader in retail media.

Walmart Connect’s mission is “to help brands and sellers connect in a meaningful way” with the 150 million customers who shop at Walmart every week, in-store or online, Lehrfeld said.

“The power of these connections and shopping experiences, combined with Walmart’s scale and reach to U.S. shoppers in-store and online, propels Walmart Connect” on this trajectory, he said.

Walmart Connect uses a three-pronged strategy to deliver more to advertisers, Lehrfeld said.

First, it uses new formats to showcase brands, such as in-store video, self-checkout screens and TV walls. It will also use less technological methods such as in-store events and product sampling.

Lehrfeld also hinted at a few innovations on its e-commerce site coming by the end of the year. “We will be moving toward new premium ad experiences on Walmart.com, including testing new ad units and onsite video,” he said.

Second, Walmart Connect gives vendors and sellers of all sizes automated systems to help them grow their businesses, Lehrfeld said. These are largely “self-service” tools that allow brands themselves to create and manage display campaigns on Walmart.com.

Walmart Connect expands its Walmart Platform Partner Network, where advertisers choose an expert company to help scale and automate their search campaigns. In addition to the network’s nine partners, Austin-based Jungle Scout is a leading all-in-one platform for sellers on Walmart and e-commerce giant Amazon.

The third tier builds on current offerings such as improving targeting and search capabilities and expanding its measurement capabilities for all of its offerings, including in-store ad placements.

Lehrfeld said Walmart Connect will also continue to evolve what he calls a “One Walmart” approach. This allows suppliers to utilize resources in multiple Walmart areas such as merchandising, on-site operations, and marketing.

To help advertisers fully understand and use the self-service tools Walmart offers, Walmart Connect offers several training opportunities. Training topics include product overviews, campaign setup and management, and optimization techniques, a Walmart Connect spokeswoman said.

The training is offered in several formats, she says, depending on the content and advertisers’ needs.

“This year we launched WMC Academy, an online platform where advertisers can take courses at their convenience,” the spokeswoman said. Walmart Connect also hosts webinars and in-person classroom training, she said.

The company realizes that customers want to know and control how data Walmart collects is used, she said. The Bentonville-based digital citizenship team “advises the business on information privacy, how to use and manage data, emerging technologies, cybersecurity, records management and more,” the company said. spokesperson.

Digital ad spending is “rising,” according to a December report from research firm eMarketer. The shift to ad-supported video-on-demand, despite the continued popularity of subscription services, is just one of many developments reflecting this push.

In fact, eMarketer expects the digital advertising market to grow nearly 50% to $300 billion by 2025. This will account for more than 75% of all media spending, the company said.

“The advertising agency industry is changing quite dramatically as media becomes increasingly digital,” said Martin Block, executive director of the Retail Analytics Council and professor of integrated marketing communications at Northwestern University.

“And it might sound a little strange, but more and more advertisers are taking more responsibility for their own messages. Not all of them, but more,” he said.

“Slowly but surely, traditional media are seeing their relative influence and relative audience decline, and I’m sure Walmart has noticed that,” Block said. “And I guess they’re trying to get into the digital world as much as they can. I think that’s where they see the competition coming from.”

Block and Mark Cohen, director of retail studies at Columbia University’s Graduate School of Business, said it’s not other ad agencies Walmart Connect is competing against, but other retailers. , namely Amazon.

Cohen said the difference between Amazon and Walmart “is that Amazon is a marketplace and has been able to generate revenue from the things they sell.

“Walmart is a store, although it likes to think of itself as a marketplace,” Cohen said. “They have to be sure not to advertise things that aren’t big sellers.”

If Walmart Connect’s plans are enough to make it a “leading advertising platform,” Cohen said, “we’ll have to wait and see what kind of strategy they really launch.”

“This is a company that writes a check first and thinks about what to do with it later,” Cohen said. “There’s an old phrase ‘ready, shoot, aim’ and I think Walmart is guilty of that.”

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