Walmart companions with The Commerce Desk for the promoting enterprise

A shopper who refused to wear a mask leaves a Walmart store in Bradford, Pennsylvania, USA on July 20, 2020.

Brendan McDermid | Reuters

Walmart is renaming its advertising business Walmart Connect and announcing a number of strategic moves, including a new offering from ad tech company The Trade Desk.

The moves are designed to help Walmart in its attempts to grow the segment more than ten times its size over the next five years, the company told CNBC, and help Walmart hold its own against competitor Amazon. Walmart Media Group boasts of its “massive size” and “massive reach” for advertisers, saying that 160 million customers visit their stores or website every month.

But it’s still a small part of the company’s revenue base. In its 2020 annual report, the company said that the Walmart Media Group combined with “fuel and financial services and related products” accounts for less than 1% of its annual net sales, which amounted to $ 524 billion.

By comparison, Amazon’s Other business, which “primarily comprises sales of advertising services,” had revenue of $ 5.4 billion in the third quarter, representing nearly 6% of the company’s total revenue. On an annual basis, it is growing steadily by more than 40%.

Although Walmart’s advertising business is smaller than its tech competitors, the segment has seen a boom during the pandemic as so many consumers buy groceries and other items online.

What Walmart Connect includes

To expand its reach, Walmart is partnering with The Trade Desk, whose technology helps brands and agencies reach audiences across media formats and devices.

The companies are building a demand-side platform (DSP) that uses Walmart shopper data to serve targeted ads on the Internet, not just on Walmart’s own websites. AdExchanger reported last year that the Walmart Media Group was doing a back-off between Xandr and The Trade Desk to select a partner for external advertising.

“We are pretty confident that we can grow this business into one of the top 10 advertising platforms in the US over the next few years,” said Janey Whiteside, Walmart’s chief customer officer, in an interview. She said the physical footprint is a key differentiator. “When someone sees an ad online and later buys it [item] A day, a week later in the store, we can combine that … what advertisers couldn’t get in the past. “

To date, Walmart has operated a display advertising network through which advertisers can reach Walmart customers on-site and off-site. However, these off-site offers were only available through the managed service. The DSP, on the other hand, lets advertisers buy directly. The company said that when the DSP launches, advertisers will have access to all of the inventory The Trade Desk is offering, including attached TV, video, audio, cellphone and display.

Walmart is also building its business on its own digital properties, including and its app. Techniques such as search and display advertising are used there in order to place advertising messages “right next to the place where customers make purchase decisions”. The company said it had doubled revenue and the number of advertisers in this segment in the past fiscal year.

Finally, Walmart said it will allow advertisers to purchase in-store TV wall placements and self-checkout screens that cover more than 170,000 digital screens in more than 4,500 stores. The company said these can be supplied with the date, time and geographic specificity. Whiteside said this could be in the form of contextual displays that are weather-appropriate or useful for a specific hyperlocal region.

“We know enough about what grain you’ve looked at, what grain you’ve bought, whether you’ve ever been interested in oatmeal or not, to be able to put an oatmeal ad at the checkout or even on the checkout screen for you,” she said.

The company also wants to sell advertising for its events, e.g. B. the drive-in movie events it hosted last year or the trick-or-treating through Halloween.

“Think about the highly contextual and relevant opportunities for advertisers, whether that’s possible through on-site ads, spot checks, or anything we can do,” said Whiteside.

– CNBC’s Melissa Repko contributed to the coverage.

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