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Walmart plans big push to challenge Amazon on advertising

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Melissa Fares and Sheila Dang
·2 min read
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By Melissa Fares and Sheila Dang

NEW YORK/ DALLAS, Jan 28 (Reuters) - Walmart Inc plans to expand its advertising business, adding space for ads at its U.S. stores and sharing its vast trove of shopper data with brands, the world's largest retailer said on Thursday, looking to challenge rival Amazon.com Inc as a media powerhouse.

The efforts are key to Walmart’s aggressive plan to grow its advertising business by more than 10 times within the next five years, according to a source familiar with the matter.

Reuters previously reported Walmart’s annual advertising revenues were expected to be nearly $1 billion in 2020.

The Bentonville, Arkansas-based company, with nearly 5,000 stores nationwide, has set a goal to become one of the top 10 advertising platforms in the United States within the next five years, a “slightly conservative,” goal, the source said.

Walmart has expanded its advertising business after years of stuttering progress, even as a deal to buy a 7.5% stake in video-sharing app TikTok remains in limbo.

Walmart refocused its strategy starting in early 2019, cutting ties with its external advertising partner and taking the business in-house as Walmart Media Group. Now, it will be named Walmart Connect, the company said.

“This is about us really digging in and pivoting the business from one which was really focused on search and display with our biggest suppliers,” Walmart’s chief customer officer Janey Whiteside told Reuters. “We want to continue to do that, leverage our physical properties, and find ways to help advertisers make better use of their dollars.”

Walmart said it will build a new advertising platform in partnership with ad technology company Trade Desk Inc. It will allow brands to use Walmart’s ample shopper data to make ads more effective, even on websites and apps Walmart does not own.

Brands will be able to target ads to audiences using Walmart’s data on shopping behavior across categories and brands. Advertisers can then monitor sales inside Walmart stores in real-time and adjust ad campaigns as needed, Whiteside said.

Accurately measuring whether an ad led to a purchase has been a long-term technological challenge. Walmart is betting that allowing brands to use its data on ads across streaming video or smart TVs will draw in more ad dollars.

The retailer said it will take advantage of its brick-and-mortar stores to compete with online retailer Amazon, and will sell ads on over 170,000 screens inside more than 4,500 U.S. stores, including on TVs and screens of self-checkout kiosks.

“We have this unparalleled source of data that we can bring to bear,” Whiteside said. “Who else can actually tell you if a customer saw something online and then a week later, physically bought it in the store?” (Reporting by Melissa Fares in New York and Sheila Dang in Dallas; editing by Vanessa O'Connell, Kenneth Li and David Gregorio)