Walmart Hopes to Take a Bite Out of Amazon & Facebook with New Ad Offering

By now, you’ve noticed Amazon’s effort to insert advertising into their listings when you’re online shopping.

By letting companies pay for a high rank in results, Amazon’s ad sales and other revenue jumped 95% to $3.4 billion in the fourth quarter.

With those types of numbers, it’s no wonder why Walmart wants to start playing the ad game and doing the same.

A few short days ago, Walmart announced that they are going to begin monetizing their customer data. The goal? To become a go-to ad network for retail manufacturers, both online and in-house.

They plan to cut ties with Triad, the company that managed ad sales on retailers’ sites and other digital platforms, in an effort to bring its ad sales in-house, bridging the divide between store and digital ad teams.

Will It Be Effective?

There’s no way to know for sure, but a few key things point towards success for Walmart and its retailers.

Walmart executives think they can bring a different approach to advertising because of the company’s unique combination of online and store purchase data from hundreds of millions of customers; this could be something that could make their ad buys more efficient than Amazon and other big companies in the space.

In addition, Walmart’s online sales rose 43% for the fourth quarter of fiscal 2019, and about 300 million shoppers visit Walmart’s stores every month. All in all, Walmart attracts more shoppers than Amazon, Facebook, and Google.

The downfall? The in-house and technological effort to become a success in this space could take years -- something Amazon has already realized.

Why Should Marketers Care?

The obvious reason is there’s now a bigger opportunity for retailers to “pay to play.”

With the internet becoming so saturated with content, products, and services, both organic and promoted, a large database like Walmart’s could be prime to get in front of, especially for eCommerce or B2C businesses.

If your audience shops at Walmart regularly, this is a huge opportunity.

Walmart executives say they “want CMOs to consider ‘Walmart as a network I can go advertise on.’”

It’s unknown what the process will be for companies to insert themselves into search results online (or potentially even on televisions in Walmart stores!), but it could be a huge opportunity for them to increase awareness and sales.

Walmart even has a plan for combating the biggest challenge for companies and marketers: gauging whether they’re generating a return on their investment.

Because Walmart can connect data from both stores and online, they are preaching that this way of advertising is going to be much more effective than other solutions.

I’m interested to see how the rest of this pans out. Stay tuned!