- Walmart is going after Amazon's advertising business by formally rolling out a self-serve platform and API that allows advertisers to buy search ads through third-party adtech companies.
- The move comes a year after Walmart started moving its ad business in-house.
- Walmart's pitch to advertisers is that it has data from 160 million American shoppers that includes e-commerce and in-store sales.
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Walmart wants a piece of Amazon's growing advertising business.
The retailer's advertising arm, called Walmart Media Group, is rolling out a new program called Walmart Advertising Partners, with its first self-serve tools that let advertisers buy search ads on Walmart's website and mobile app. Until now, Walmart Media Group had worked directly with advertisers through managed services. Business Insider first reported Walmart's plans in November.
Walmart has picked four e-commerce adtech companies to be part of the program: Teikametrics, Flywheel Digital, Pacvue, and Kenshoo. They'll be the first third parties to be plugged into Walmart's API to automate ad buying and have beta tested the technology for about six months.
Similar to Amazon, Walmart has ads that appear at the top of searches and are targeted based on keywords that shoppers search for. Advertisers bid on keywords using an online auction that sets ad prices based on demand from advertisers. Amazon, Facebook, Google, Snap and other large ad platforms also have APIs that manage ad spend for large advertisers.
Walmart is going after big ad budgets from brands
Alexis Josephs, VP of sales and media partnerships at Walmart Media Group, said the retailer had beta tested self-serve campaigns with a handful of advertisers including gaming manufacturer Razer. Razer worked with Teikametrics to buy eight sponsored search campaigns between Black Friday and Cyber Monday. Consumer-packaged goods (CPG) brands are some of retailers' biggest advertisers, but Josephs said that she's also seen interest from fashion, personal care, technology, and telco advertisers.
After splitting from Triad last year, which previously handled its ad sales, Walmart has staffed up to pitch advertisers, using its shopping data from about 160 million Americans, she said. E-commerce advertisers typically draw from their shopper marketing budgets, which are often smaller than the marketers' brand budgets. Amazon has also worked to pitch marketers on bigger brand budgets that measure awareness and loyalty in addition to conversions.
"We are very serious about building an in-house offering that delivers on the data and the value that we bring to brands," she said. "We understand that 90% of purchases happen in a physical retail location. Most competitors only understand the online aspect."
Josephs declined to say how much Walmart expects to make from advertising this year. Amazon is estimated to have made more than $10 billion in ad revenue in 2019.
In theory, advertisers will be able to analyze the performance of campaigns including conversions, clicks, and sales across channels through one of Walmart's adtech partners.
Walmart also sells display ads on its properties. They have to be purchased through a Walmart sales rep, although Josephs said the goal is to let advertisers buy both types of ads through the self-serve platform. Adtech firm Criteo currently handles ad sales for Walmart's display units. A spokesperson for Criteo did not answer questions about the relationship.
"The goal is to figure out what our automation strategy is for display in the near future," Josephs said.
Walmart still has kinks to work out in its move to in-housing
Advertisers that sell on Amazon and through physical stores want to diversify their ad spend away from Amazon. Kacie McKee, the director of e-commerce at Wavemaker, told Business Insider in November that 70% to 90% of e-commerce budgets go to Amazon.
"We see a ton of advertiser interest to increase product visibility as well as sales on Walmart.com," said Patrick Miller, co-founder of Flywheel Digital.
Some marketers have said that Walmart's move to take its advertising business in house has been slow and hampered by problems like delayed campaigns, though.
"They're too internal in terms of building out their own processes, figuring out who to hire and who works with agencies versus directly with clients," Wavemaker's McKee told Business Insider in November.
Josephs said that hiccups are part of building a new business.
"We've been insourcing a business that was run very differently for a decade and a half," she said. "I hear more regularly how excited marketers are and the caliber of people that we're meeting with across teams at suppliers."
