Walmart is outlining a plan to grow its advertising business

Walmart Inc. American Advertising Business will focus on innovation and automation as it wants to become a top platform for advertisers this year.

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

The company said the digital advertising agency offers advertisers access to Walmart’s shopping trends and shopping habits, as well as its own platform for targeting and measuring ads.

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

“Understanding customer demand and needs is an essential component of any retail offering,” said Seth Dallaire, revenue director, Walmart USA.

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

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

Walmart Connect’s mission is to “help brands and retailers connect meaningfully” with the 150 million customers who shop in Walmart every week in stores or online, Lehrfeld said.

“The power of these connections and shopping experiences, combined with the scope and reach of Walmart for American shoppers and online, drives Walmart Connect,” he said.

Walmart Connect uses a three-dimensional strategy to offer more advertisers, Lehrfeld said.

First, it uses new formats to present brands such as in-store video, cash register screens, and TV walls. It will also use methods with lower technologies, such as stock trading and product sampling.

Lehrfeld also hinted at some innovations on his e-commerce website that are due out by the end of the year. “We will be moving toward new premium advertising environments on Walmart.com, including testing new ad units and video on the spot,” he said.

Second, Walmart Connect provides suppliers and resellers of all sizes with automated systems to help them expand their business, Lehrfeld said. These are mostly “self-service” tools that allow brands themselves to create and manage graphic campaigns on Walmart.com.

Walmart Connect is expanding its network of Walmart platform partners, where advertisers choose a specialist company to help them scale and automate their search campaigns. Along with nine network partners, Austin-based Jungle Scout, a leading all-in-one platform for Walmart resellers and e-commerce giant Amazon, recently joined.

The third point draws on current bids, such as improved targeting and search capabilities and expanded metering options for all of your bids, including in-store ad placements.

Lehrfeld said Walmart Connect would also continue to expand what he calls the “One Walmart” approach. This allows suppliers to leverage resources in several areas of Walmart, such as merchandising, site operations and marketing.

To help advertisers understand and take full advantage of the self-service tools Walmart provides, Walmart Connect offers them several training opportunities. The training topics include product reviews, campaign setup and management, and optimization techniques, said a spokeswoman for Walmart Connect.

According to her, the training is offered in several formats depending on the content and needs of the advertisers.

“This year, we launched WMC Academy, an online platform where advertisers can take courses at their own discretion,” she said. Walmart Connect also organizes webinars and personal classroom training, she said.

The company recognizes that customers want to know and control how the data Walmart has collected about them is used, she said. The Bentonville-based digital citizenship team “advises privacy companies on how to use and manage data, new technologies, cyber security, records management and more,” the spokeswoman said.

Digital advertising spending is “growing” according to a December report by the research company eMarketer. The move to ad-supported video on demand, despite the continuing popularity of subscription-based services, is just one of several developments that reflect this increase.

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

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

“And that may seem a little strange, but more advertisers are taking more responsibility for their own messages. Not everyone, but more,” he said.

“Slowly but surely, the traditional media is declining in its relative influence and relative audience, and I’m sure Walmart noticed,” Block said. “And I should suspect they’re trying to get into the digital world as best they can. I think they see competition from there.”

Block and Mark Cohen, director of retail studies at Columbia University’s Graduate School of Business, said other Walmart Connect advertising agencies are not competing, but other retailers – specifically 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 it sells.”

“Walmart is a business, even though it likes to be considered a marketplace,” Cohen said. “They need to make sure they don’t advertise things that aren’t big sellers.”

Whether Walmart Connect’s plans are sufficient to become a “top advertising platform,” Cohen said, “We’ll have to wait and see what kind of strategy they actually launch.”

“This is the company that writes the check first and thinks about what to do with it later,” Cohen said. “There’s an old ‘ready, shoot, peace’ expression, and I think Walmart is to blame.”

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