Retail media is forecast to grow about 20% in 2025, in keeping with eMarketer, as advertisers increasingly depend on the channel to tap into retailers’ store of first-party data and reach consumers closer to the purpose of sale. Walmart Connect continues to grow at a better rate than the retail media market at large, notching 33% growth within the U.S. last quarter, outpacing the retailer’s overall sales growth by six-times and representing, together with membership fees, a couple of third of its operating income.
“Advertising has been considered one of the areas of our business that has modified essentially the most, or higher said, the impact or influence from that has modified our P&L essentially the most,” said John David Rainey, Walmart’s executive vp and CFO, on the Morgan Stanley Global Consumer & Retail Conference this month. “As we have gained share, advertisers, they need to follow the eyeballs. And so we have done very well in promoting.”
Walmart reaches 150 million customers every week between its app and stores, and may now reach 95% of the U.S. with same-day delivery — a competitive differentiator during holiday shopping and beyond. Meanwhile, its 4,600 stores unlock not only traditional consumer spending but a chance for on-site retail media. That scale, plus investment in measurement solutions and newfound connected TV prowess, is popping Walmart Connect into an promoting powerhouse.
“Walmart Connect has expanded from performance-based media to full-funnel solutions, specializing in latest experiences across all customer touch points,” wrote Seth Dallaire, executive vp and chief growth officer at Walmart U.S., in a recent LinkedIn post. “We’ve made significant strides in aligning and optimizing our promoting technology platforms, streamlining efficiency and expanding top-of-funnel opportunities for advertisers.”
Integrating Vizio
Now a 12 months on from completing a deal for smart TV maker Vizio, Walmart is seeing returns on its investment: the corporate’s global ad business including Vizio surpassed 50% growth last quarter. The CTV opportunity has helped Walmart attract non-endemic advertisers across automotive, financial services and QSR industries — a few of which have turn into the most important advertisers on the Walmart DSP.
“CTV as a complete is the fastest growing a part of Walmart Connect, and Vizio helps to fuel that,” said Ryan Mayward, senior vp of sales at Walmart Connect, in an interview with Marketing Dive.
The Vizio integration began with giving advertisers the flexibility to deal with ads to Walmart customers based on shopping history after which measure the sales impact of showing ads on Vizio screens, including each its free, ad-supported streaming service and other ad-supported apps through its operating system.
Recently, Walmart opened promoting on the Vizio home screen, using Walmart audience data for targeting and measurement. The company can also be offering a bundle that mixes the Vizio home screen and Walmart’s app home screen, and will probably be trying to do more concurrent promoting across surfaces in the long run. Next up, Walmart will probably be putting Vizio’s operating system on the retailer’s private label Onn TVs, potentially expanding the Vizio OS footprint to 25% to 30% of U.S. households.
“One of the explanations we’re so enthusiastic about Vizio is when customers see CTV ads, they’re 28% more more likely to buy products from from Walmart,” Mayward said. “The more customer touch points that a brand leverages, the more they are going to sell.”
Measurement across surfaces
Walmart has been investing heavily in bringing closed-loop measurement to all of its ad products, including search, display, video and in-app ads but in addition off-site products, social media and CTV ad purchased through the Walmart DSP. The retailer for the last 12 months has offered an incremental return on ad spend metric for search, adding one other dimension of incrementality beyond display and video.
“We’re reporting on the amount of incremental sales and the efficiency of incremental sales, and the outcomes have been great,” Mayward said. “When we speak about retail media trends, iROAS is what everybody wants for each retail media ad product, and that is where we’re headed. Signals have been necessary, after which our solutions are getting more robust.”
The retailer now offers closed-loop measurement with TikTok, TV networks and Meta, the latter constructing on a previous relationship with the social giant to now measure ROAS. The company offers measurement several ways: some through its Walmart DSP, while other offerings are bespoke integrations, like one with Disney that rolled out last 12 months.
“The thing that brands expect from us is consistent metrics across every promoting surface, whether in a Walmart store or outside of a Walmart store, and that is really what we’re delivering to them,” Mayward said.
Walmart also continues to develop its capabilities around in-store retail media, a long-discussed extension of the channel that has didn’t take off within the U.S. Along with investing within the hardware and adtech needed to activate in-store promoting, Walmart is working to introduce contextually relevant, customer-first ads and higher measure brand lift and sales lift of ads across in-store screens.
“You’re not going to see ads for power cords and screwdrivers on the bakery screen. We’re going to indicate ads which are relevant to a food shopping experience,” Mayward said.
The AI playbook
While in-store might represent the subsequent frontier in retail media, artificial intelligence continues to reshape the complete promoting landscape. Walmart is predicted to make announcements related to AI on the annual CES trade show in January, but has already applied AI to several parts of its adtech stack.
AI is integrated into its creative builder, where it could actually create image and video content quickly, cheaply and with top quality. The tech also powers a programmatic solution that has democratized advertiser access to display inventory in its app, and has improved bidding and optimization within the search experience. Similarly, AI technology helps brands construct their very own shops within the Walmart app in only minutes.
Outside of promoting, Walmart is experimenting with AI through Sparky, its customer-facing generative AI assistant, and via a partnership with OpenAI that may bring shopping to ChatGPT. And while the rise of agentic commerce could change how consumers shop — and the way advertisers spend on Walmart Connect — the retailer is embracing experimentation.
“The playbook for the subsequent phase of of commerce, marketing, promoting, adtech and content creation — it will be written in real time,” Mayward said.
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