Walmart ad biz growth continues to outpace rivals

    • Walmart’s U.S. advertising division, Walmart Connect, saw sales increase nearly 40% in the first quarter of fiscal year 2024, per the company’s latest earnings report. Its global advertising business grew over 30% in that period.
    • The number of third-party sellers utilizing the company’s ad capabilities has doubled over the past 12 months. Its Sam’s Club ad business grew double-digits, with the number of active advertisers increasing more than 50% year-over-year, while India-focused Flipkart ads increased over 50%, driving its international ad business.
    • Walmart executives said that new advertisers, especially from Marketplace sellers, are helping to drive Connect’s momentum, with Sam’s Club attracting advertisers with its recently launched sales attribution features.

    Walmart’s advertising business continues to increase sales, in the U.S. and internationally. The retailer has worked to expand a portfolio of initiatives — spanning advertising, data, membership and more — that drive stronger returns due to higher operating margins than its core business.

    The double-digit growth rates for Walmart’s ad bets outpace those of chief competitor Amazon, whose ad sales were up 23% in the last quarter, along with more mature, broadly digital platforms like Alphabet and Meta. While Walmart’s global ad business, which generated $2.7 billion in 2022, is still dwarfed by those rivals, it continues to scale at an impressive rate.

    Walmart attributed its upward trajectory to several factors, pinning Connect’s momentum to its second-price auction capability. A common feature in programmatic bidding, the product launched last year and has continued to scale. Internationally, Flipkart ads in India grew about 50% year-over-year, with Walmex ads in Mexico and Central America seeing 64% year-over-year growth.

    Meanwhile, Sam’s Club’s retail media offering, called Member Access Platform, has seen both sales and the number of advertisers on its platform increase as it has rolled out an in-club sales attribution feature that provides insights about the ROI of digital ads. The Walmart subsidiary in March partnered with The Trade Desk and LiveRamp to leverage first-party member data, advertiser data and artificial intelligence-powered behavioral insights to increase ad effectiveness and personalization.

    “We’re giving those advertisers visibility to the in-club sales and the online sales and stitching them together. They’re seeing this lift on their return on advertising spend,” said Kathryn McLay, president and CEO of Sam’s Club, on the earnings call. “So it’s a different model [than Walmart U.S. and international], but we’re happy with the tools and capabilities we’re building out and how that’s resonating with our advertisers.”


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