- Walmart has agreed to acquire TV maker Vizio for $2.3 billion in money to speed up growth for Walmart Connect, its U.S. promoting arm, according to a press release. The news was announced around Walmart’s fourth-quarter earnings Tuesday.
- The deal provides the big-box store with one other channel to reach consumers at home as connected TV (CTV) and streaming viewership surge. Vizio also has an promoting arm with its own technology solutions and over 500 direct brand relationships, contributing to Connect’s scale.
- The acquisition helps Walmart meet up with Amazon, which dominates the retail media category and owns the Fire TV line of smart TV hardware. Walmart’s sales derived from promoting are substantially smaller than its competitor’s but growing quickly, with Connect revenue up 30% in fiscal 2024, per the earnings statement.
Walmart’s purchase of Vizio gives the big-box store a strong chip as retail media networks race to improve their sophistication in additional premium promoting areas like streaming video. Walmart Connect stands at the highest of the heap amongst traditional retailers attempting to construct out an promoting business but lags behind Amazon, which has won favor with brands thanks to its sprawling e-commerce marketplace and big reach enhanced by offerings like Fire TV.
Vizio acts as Walmart’s answer to Fire TV while providing Connect with additional ad solutions, direct advertiser relationships and scale. Founded in 2002, Vizio has develop into a top-selling TV brand at Walmart. The company’s smart TVs include a built-in SmartCast system that permits viewers to watch content for free with commercials, an approach that has provided the muse for Vizio’s Platform Plus division. Platform Plus, which mostly focuses on promoting, accounts for the vast majority of Vizio’s gross profits while SmartCast today has over 18 million lively accounts, according to the press release.
“We consider VIZIO’s customer-centric operating system provides great viewing experiences at attractive price points. We also consider it enables a profitable promoting business that’s rapidly scaling,” said Seth Dallaire, executive vp and chief revenue officer at Walmart U.S., in a press release across the deal. “Our media business, Walmart Connect, helps brands create meaningful connections with the thousands and thousands of shoppers who shop with us each week. We consider the mix of those two businesses can be impactful as we redefine the intersection of retail and entertainment.”
Walmart’s $2.3 billion bet on Vizio is one other sign that mature retail media networks are eyeing CTV and streaming as their next competitive frontiers. To date, retail media networks have derived most of their revenue from lower-funnel formats like sponsored search and display promoting. But video presents a possibility to develop more top-of-funnel and brand-building capabilities that would further appeal to advertisers. CTV is forecast by eMarketer to grow U.S. revenues by 22.4% this 12 months to hit $30.1 billion.
Connect performed well through the key Q4 window, with revenue up 22% 12 months over 12 months. Full-year revenue for the unit increased 30%, while Walmart’s global ad business, which incorporates offerings like India-based Flipkart, was up 28% YoY to $3.4 billion. For comparison, Amazon’s ad sales totaled $14.6 billion in Q4 2023 alone.
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