Retail media is becoming a bigger factor in today’s market, and Rich Lehrfeld, senior vice president and general manager, Walmart Connect, detailed where the retailer is going with its entertainment and advertising venture.
Walmart is currently pursuing an acquisition of Vizio — even if it hit what looks so far to be a small glitch with regulator documentation — not just for its television business but also largely to onboard its streaming services as a way to reach more consumers and pursue what it sees as a key opportunity. In a fourth-quarter conference call, Doug McMillon, Walmart president and CEO, said the company drove advertising growth of 28% for the year to reach $3.4 billion globally. Amazon, which has been developing a multifaceted media and advertising operation for years now reported it generated $14.65 billion in advertising and related revenue during its fourth quarter.
Keyword and other online marketing have existed almost since the beginning of Internet commerce. However, today, with more media integration, online marketing is becoming more sophisticated and lucrative. A couple of years ago, Walmart put new emphasis on its approach to consumer outreach for profit when it reorganized existing initiatives under the Walmart Connect banner.
Now, Lehrfeld stated, the mission of Walmart Connect is to “create meaningful connections between our customers and the brands that matter most to them. For customers, this means new experiences to discover the right products at the right time to save money and live better. For brands, we help boost their visibility and ways to grow with Walmart. Successfully creating those connections is a win for customers, brands and Walmart. The role of our advertising business is earning increased attention, especially after the announcement of our agreement to acquire Vizio, our rollout of new in-store experiences, and pilots with major media partners. But the heart of what we do is more than just retail media: We help brands solve their biggest marketing challenges through customer-centric solutions that reflect Walmart’s values.”
Long-term, Lehrfeld said, Walmart’s focus is creating new ways for brands of all sizes to connect with customers and increase the performance and value of the Walmart Connect operation. To do so this year, Lehrfeld noted, Walmart intends to provide more options for more advertiser types, giving Connect customers additional choices. The company will boost brand discovery for both new and established operators to make it even easier for businesses of any size to access Walmart Connect.
Marketplace sellers are now Walmart’s fastest-growing advertisers. Their sponsored search advertising spending grew by 63% last year and doubled on Walmart’s self-serve platform. Walmart is automating and scaling its advertising suite further to increase client access to more advertiser types, Lehrfeld wrote.
In doing so, he added, Walmart plans several benefits:
Expanded Onsite Display Access. The Walmart Display function is becoming primarily programmatic and auction-based, with greater access and control. The company is making it available to brands of all sizes starting this month. Emerging brands, including marketplace sellers, will have access to Onsite Display placements for the first time through the Walmart Ad Center, the company’s self-service platform.
Supporting Non-Endemic Brands. Walmart is offering offsite media to support brands that don’t sell with Walmart but offer complementary products and services relevant to its customers, starting with automotive, entertainment, financial services, quick-service restaurants, and travel.
Increased International Support. Walmart started adding internationally based technology providers to its Partner Network last year to support businesses outside the United States. Now, it is introducing localized self-serve support tools and education to make using Walmart’s media services easier for international sellers.
At the same time, Walmart will test new offsite frontiers, Lehrfeld indicated, which includes its stores. It will explore new media experiences that help marketers address their needs across the entire funnel and are additive to the customer’s shopping experience. Walmart is creating additional customer-centric connection points that give marketers more options to achieve their goals by expanding demo stations and sampling. They also can try out new ways of reaching customers, boosting awareness, and driving consideration. Walmart also will introduce in-store campaign management to the Walmart Ad Center, starting with TV Wall ads. It will enhance media partnerships as it builds from recent pilots with Roku and TikTok to provide additional options for advertisers.
Walmart’s plans also include improving targeting and full-funnel measurement. Brands want to get more out of every advertising dollar. Walmart provides the precision clients need with advanced targeting and measurement solutions, powered by the company’s first-party insights, to better understand the impact of their campaigns across the entire shopping journey, Lehrfeld maintained.
In 2024, Walmart will advance measurement and targeting capabilities even further, he asserted. The company is testing in-store attribution for Sponsored Search ads, which it expects to enhance throughout the year. Walmart will also introduce conversion lift for in-store campaigns and store lift and reach for in-store demos. The company will roll out brand lift measurement and rest-of-market analysis for Walmart’s Demand Side Platform, which supports eligible advertisers in targeting shoppers offsite through audio, video, CTV, mobile, video, and display advertising, and In-Store Audio. With the move, the company will expand access to Walmart AdMix and consideration metrics. It also will encourage advanced targeting, for example combining brand term targeting with Sponsored Search ads.
Walmart’s Connect agenda also includes expanded creative capabilities, according to Lehrfeld. The company can help advertisers craft omnichannel programs grounded in its proprietary insights. This year, Walmart is expanding its managed and self-serve solutions to support advertisers with more creative capabilities. Advertisers can expect more integrated marketing solutions to help them target the moments that matter most in a customer’s shopping journey, including seasonal programs and single-supplier-led store events. Walmart will boost self-serve capabilities so that, this year, advertisers can look forward to enhancements in video, new templates and expanded discoverability. Later in 2024, Walmart Connect partners will be able to plug into a machine learning-powered self-serve tool for building and optimizing ad creative, dubbed Creative Builder. Walmart also is set on introducing performance reports for campaign creative.
“Delivering these solutions to our suppliers, sellers and partners will take our retail media offering to the next level this year,” Lehrfeld declared, “but more importantly, support them better as they navigate an increasingly complex marketing landscape. It’s how we put Walmart’s purpose in motion as a people-led, tech-powered omnichannel retailer to better serve our customers and the brands that work with us.
