Walmart launches ad buying platform to take on Amazon
- Walmart now allows advertisers to serve ads to people who have viewed specific products online.
- Advertisers will be able to target people based on what they have purchased previously and may purchase in the future.
- Although better positioned to compete with Amazon, one ad buyer said Walmart still needs to catch up.
Walmart has rolled out a key part of its plan to compete with Amazon’s dominance in e-commerce advertising.
Using Walmart’s new ad buying software called Walmart DSP, advertisers can serve ads to people based on their browsing of specific products on Walmart’s website and app, a practice called retargeting. These advertisements will then appear on sites with which Walmart has partnered, but which it does not own.
The Walmart DSP, which will be available in October, is crucial to Walmart’s ambitions to automate more parts of its advertising business – a goal it set for itself earlier this year. This gives the ad buying platform a disproportionate role in attracting larger ad budgets and competing with Amazon.
The retailer hopes to attract advertisers to Walmart DSP by dangling large, rich buyer data sets as well as measurement tools that track whether someone has purchased a product after seeing a retargeted ad, Rich Lehrfeld said. , senior vice president of Walmart Connect.
Advertisers will also be able to run ads based on someone’s previous purchases and Walmart’s forecast indicating other products that may be of interest to customers, Lehrfeld added. Hershey’s, for example, sells hundreds of different products on Walmart and may show specific types of posts to people, depending on which Hershey’s products they are likely to buy.
Larger Walmart vendors can access DSP by the end of October to run their vacation campaigns.
He added that Walmart’s DSP will be able to purchase the same ad inventory as The Trade Desk, including slots for connected TVs, desktops and mobiles.
But even as Walmart improves the capabilities it offers advertisers, it still needs to do more to justify the investment, according to ad buying sources.
Briana Finelli, director of research and e-commerce media at IPG-owned Reprise Digital, said her customers plan to invest in Walmart’s DSP this year, but its functionality has lagged behind Amazon.
While Walmart notes that the campaigns have yet to run through Walmart’s DSP, Finelli saw the list of its capabilities and said that Amazon’s DSP allows advertisers to purchase ads in an environment of auctions, as well as fixed-price search and display ads. Advertisers like to have different ways of buying inventory. But Walmart does not allow these different types of transactions.
Instead, Finelli said, advertisers traditionally have to purchase ads through Walmart DSP, reserving inventory at a fixed CPM, which is the cost advertisers pay to reach 1,000 people.
Another example of how Walmart’s advertising offering still lags behind Amazon is that, while it just turned on retargeting, Amazon’s platform already has it. Additionally, Amazon’s platform is already very popular with ad buyers. A report from the analyst firm Advertiser Perceptions Amazon was the preferred ad buying platform for advertisers at the end of last year, followed by Google and The Trade Desk.
Finally, as Walmart presents its DSP as a competitor to Amazon, Finelli said that Walmart’s ad buying tools are more difficult to use.
Still, there is no doubt that Walmart’s advertising business is growing, as the number of advertisers running campaigns through Walmart’s advertising business has grown 175% year-over-year. But while Amazon is Walmart’s biggest competitor for retail ad dollars, it’s not the only competitor. Target, for example, also has mature and growing ad sales businesses. And more and more retailers like Walgreens and Kroger are starting to start their own advertising businesses as well.
Billy Courtney, director of digital partnerships at The Stable, said Walmart has less organic traffic than Amazon and DSP is a way to get people to come back to Walmart’s site. Increased traffic from Walmart could lead to increased advertiser interest and higher ad prices for formats on Walmart’s site and app, where the bulk of retail media ad sales occur. .
“A lot of people want to compare to Amazon, but Amazon has a lot more organic traffic – Walmart has to find other ways to generate that,” he said.
And like Walmart, they’re all trying to catch up with Amazon in part by offering software to make it easier for advertisers to buy ads from them.
“All retailers are trying to make advertisers more nimble, but it shows how flexible you can be with Amazon,” Finelli said.