The Faith of Walmart: How the Company is Converting Customers and Advertisers with its Media Network

Walmart is not just a store. It’s a faith. A faith in the power of cheap, in the miracle of more. 

A faith that has converted millions of Americans into loyal disciples, who flock to its temples of consumption, seeking salvation in the form of bargains and convenience. 

And like any faith, Walmart has a mission: to spread its gospel across the world.

Walmart’s advertising arm, known as Walmart Connect, has grown exponentially in the past two years, becoming one of the largest and most influential players in the retail media landscape. According to the company’s executives, who spoke on a call discussing the retailer’s second-quarter results for fiscal 2023, Walmart Connect’s ad sales grew 36% year-over-year in Q2, while Walmart’s global ad business, which includes India-based Flipkart, was up 36% YoY and advertising from its Sam’s Club brand was up 33% YoY. [Marketing Dive] reported that Walmart calculates its advertising figures either in net sales or as a reduction to the cost of sales based on the nature of the arrangement with the advertiser.

What drives this impressive growth? Walmart Connect claims to offer advertisers a unique value proposition: access to a massive and loyal customer base, both online and offline, and the ability to track and measure the impact of their ads on sales and behavior. Walmart Connect competes with other retail media giants, such as Amazon and Target, by leveraging its “flywheel” of products, which include sponsored products ads, display ads, video ads, search ads, and in-store marketing channels.

Walmart Connect has been testing new ways to monetize its physical assets, which span more than 4,700 U.S. brick-and-mortar locations. Shoppers will soon see more third-party ads on screens in Walmart self-checkout lanes and TV aisles; hear spots over the store’s radio; and be able to sample items at demo stations. Walmart Connect has also introduced QR codes on shopping carts and ads running on the company-owned Walmart Radio Network. These innovations aim to create more touchpoints for advertisers to reach consumers at different stages of their shopping journey, from awareness to consideration to purchase.

But Walmart Connect is not just about selling ad space. It’s also about building partnerships. Partnerships that can help advertisers create better ads, reach more customers, and achieve better results. That’s why Walmart Connect has expanded its partnership ecosystem, renaming it as the Walmart Connect Partner Network.

The Walmart Connect Partner Network consists of four types of partners: creative partners, solution partners, service partners, and technology partners. Creative partners are third-party agencies or platforms that offer a variety of creative services to support Walmart Connect’s self-serve ad platforms, such as item set-up, video creation and editing, and display content support. Solution partners are API partners that help advertisers scale, automate, and optimize their search campaigns. Service partners are agencies that help advertisers plan, buy and optimize their media through Walmart Connect. Technology partners are platforms that offer offsite placements or capabilities for advertisers using Walmart Connect.

Walmart Connect launched its creative partner program in June 2023, making creative partners available to self-serve advertisers participating in Walmart Connect. Some of the creative partners include VidMob, WhyteSpyder, Kaizen Ad, It’sRapid.ai, and The Mars Agency. These partners offer managed services and proprietary technology that can help advertisers improve their ad creative and connect with customers wherever they are in their shopping journey.

The Walmart Connect Partner Network also includes other enhancements that Walmart has made in the past year. For example, it introduced its new Innovation Partners program, which provides “test and learn” opportunities with social, entertainment, digital TV commerce and livestreaming platforms for the 2022 holiday season. It also partnered with e-commerce management platform CommerceIQ to offer automated management of sponsored product and sponsored brand amplifier advertising for CPG brands that target its customers via Walmart Connect.

These partners can help to increase advertiser growth at Walmart by optimizing ad creative to connect with customers wherever they are in their shopping journey,” Diana Finster, head of agency and technology partnerships for Walmart Connect, said in a corporate blog post. “Access to these services will become even more essential to Walmart’s self-serve advertisers as we introduce new ad experiences across our full-funnel, omnichannel solutions.

Walmart’s strong performance in advertising was matched by its overall earnings, which impressed investors and prompted the company to raise its full-year forecast. Revenue derived from e-commerce, which complements Walmart’s ad bets, jumped 24% YoY on strengths in pickup and delivery. A sunny report contrasted with that of chief rival Target, which was embroiled in controversy over Pride Month promotions during the Q2 period.

Walmart Connect’s continued momentum offers another sign that retail media remains a growth juggernaut despite mounting advertiser frustrations with the fragmentary nature of the space and a wishy-washy market for digital advertising more broadly. Amazon, the largest retail media player, saw ad sales up 22% year-over-year in Q2 to $10.7 billion.

But Walmart is not content with being second best. It has a vision of becoming the ultimate destination for shoppers and advertisers alike, a one-stop shop for everything from groceries to gadgets to gospel. Walmart is not just selling products; it’s selling a way of life. And it wants you to buy into it.

Pesach Lattin
Editor-in-Chief, ADOTAT

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