Walmart is rapidly shaking up the retail advertising world, making a serious run at a market long controlled by Amazon. Through its advertising arm, Walmart Connect, the company is leveraging its massive store footprint and booming e-commerce business to attract big ad dollars. This strategic push is quickly turning Walmart into a formidable competitor in the global retail media landscape.
Walmart Connect’s Explosive Growth
The growth of Walmart’s advertising platform has been nothing short of remarkable. According to research from Digiday, the number of marketers using Walmart Connect has nearly doubled in just one year, jumping from 24% to 46%.
This surge in adoption is not an accident. It is the direct result of Walmart’s significant investments in strengthening its search capabilities and expanding its advertising options beyond its own website and app.
The company’s unique advantage lies in its immense physical and digital scale. With over 4,600 stores across the U.S. and an e-commerce business that surpassed $100 billion in sales last year, Walmart offers advertisers an unparalleled reach to millions of shoppers every day.
The “Pay-to-Play” Reality for Brands
For many brands, especially those in the consumer packaged goods (CPG) sector, advertising with Walmart is becoming essential for success. Some industry insiders describe the system as “pay-to-play,” where spending more on Walmart Connect is seen as a way to gain favor.
This can allegedly lead to tangible benefits, such as getting premium shelf space in stores or better support for promotional displays. While this dynamic is controversial, it highlights the high stakes for brands that need to stay visible within Walmart’s vast ecosystem.
Walmart, however, insists that its advertising and product-buying departments operate separately. The company maintains that there is no pressure on suppliers to advertise as a condition for getting their products on shelves.
Expanding Beyond its Stores with Key Partnerships
Walmart is strategically extending its advertising reach far beyond its own properties. The company is actively forming partnerships to tap into new audiences and attract advertising budgets that might typically go to traditional media.
This strategy allows Walmart to compete for a wider range of ad dollars, including those from brands that do not sell products in its stores.
- Social Media and Entertainment: Collaborations with platforms like TikTok and Disney help Walmart connect with consumers in new and engaging ways.
- Streaming Content: A partnership with NBCUniversal introduced shoppable ads directly into streaming shows, blending content and commerce.
- Smart TVs: The recent acquisition of Vizio, a smart TV manufacturer, signals a major push into the connected TV advertising space.
These moves are positioning Walmart as a powerful force not just in retail media, but in the broader advertising industry. As one agency executive noted, “They’re not just enhancing retail media capabilities but also becoming a contender for traditional advertising dollars.”
E-Commerce Success Fuels Ad Business
The strong performance of Walmart’s e-commerce division is a critical engine for its advertising growth. With six straight quarters of double-digit growth in the U.S., the website and app are attracting more shoppers than ever.
This increased traffic generates a massive amount of valuable first-party data on shopper behavior. This data goldmine allows advertisers to create highly targeted and effective campaigns, giving them more reason to invest in the platform. The synergy is clear on the company’s balance sheet, as retail media now accounts for a significant portion of Walmart’s operating income.
Challenges and the Road Ahead
Despite its impressive progress, Walmart still has ground to cover to catch up to Amazon’s lead in the retail media market. Experts suggest that Walmart’s growth is currently focused on capturing new marketing budgets rather than stealing market share directly from Amazon.
The industry also faces broader challenges, such as a lack of standardized metrics, which makes it difficult for marketers to compare performance across different retail media platforms.
Looking forward, Walmart’s acquisition of Vizio could be a pivotal moment. If Walmart successfully integrates streaming ad capabilities, it could unlock a massive new revenue stream from brand marketing budgets. This would solidify Walmart’s position as a top-tier player in the entire advertising landscape and significantly close the gap with its biggest rival.
