More

    Walmart e-commerce, ads biz create ‘mutually reinforcing’ ecosystem, CEO says

    • Walmart Connect, the U.S. advertising division of the big-box store, grew 40% year-on-year in the company’s fiscal third quarter, according to an earnings statement
    • Ad sales growth at the global level increased by more than 30%, with India-based Flipkart Ads another area of strength. On a call discussing the results with analysts, executives emphasized e-commerce expansion supports advertising growth, and vice versa.
    • CEO Doug McMillon also noted that Q3 saw the highest spending all year on sponsored search, a key advertising format. Walmart Connect introduced a number of innovation partners and tech features during the quarter that could help it extend its reach heading into the holiday season.

    Walmart’s advertising segment stayed on an upward trajectory in Q3, reflecting the influx of dollars continuing to flow to retail media amid a downturn. The growth rate of ad sales at the global level has held steady for the company this year, hovering at around 30%, despite a weakened economy that has seen marketers peel back elsewhere.   

    Compared to earlier in 2022, the big-box chain’s business is healthier in a broad sense, with sales beating analyst expectations in Q3. Total revenues were up 8.7% to $152.8 billion, and Walmart raised its full-year outlook. That contrasts with Target, a key competitor, which also reported earnings this week and gave investors the jitters due to a soft holiday forecast. Target operates a rival ad network called Roundel. 

    E-commerce grew 16% YoY for Walmart over the period, and about 13% of total sales this year have begun in “a digital fashion,” according to executives. Gains in online retail are helping drive the success of advertising, attracting a wider assortment of sellers that will pay to promote their goods through formats like sponsored search and display listings. 

    “They’re mutually reinforcing,” said McMillon on the analyst call. “If we double-click on advertising with Walmart Connect in the U.S., we see it’s benefiting from growth in e-commerce and from improvements made within the business itself.”

    Walmart Connect rolled out a slew of products in recent months to stay on the leading edge of a crowded retail media category and prepare for a holiday window where marketers are expected to be more budget-crunched. 

    In September, the group made more of its search capabilities self-service features to court smaller and newer brands looking to boost their profile. It also simplified the onboarding process for its self-service advertising portal. 

    Later that month, the ads division unveiled an innovation partners program that lets marketers use Walmart data to target campaigns and measure on popular third-party platforms like TikTok and Snapchat that hold appeal with younger shoppers. The initiative also encompasses livestreaming partnerships as Walmart tries to more closely wed shopping and video technology, a concept that’s popular in other markets like China but has struggled to take off in the U.S.

    spot_img

    Latest articles

    Related articles

    spot_img