In May, Walmart announced that global ecommerce sales in the company’s first fiscal quarter grew 21%. With 37 million daily customers on Walmart.com and annual sales topping $60 billion, Walmart’s online growth is not so much slow and steady – it’s fast and explosive. More consumers are turning to Walmart for eCommerce purchases – including high-income customers buying through the growing popularity of Walmart’s delivery and pick-up businesses.
Walmart is gaining new territory in the eCommerce game: the online business, long dominated by the grocery category, is seeing growth in categories like home goods and sporting goods.
Then, of course, there’s the Walmart’s advertising business: Walmart Connect. When Walmart announced the newly named business in 2021, advertisers were intrigued but cautious. At Pacvue, we saw a number of clients run campaigns to test ad performance with mixed results.
Those days are over: Walmart’s ad business is worth around $3.4 billion and has grown 24% year-over-year. US ad sales from marketplace sellers grew more than 50%. With Walmart Connect’s newest ad solutions, there’s a lot of potential for advertisers to reach a new audience – and, according to our most recent data, to reach them at an efficient price.
The Good, the Bad, and the Connected
As the retail media category becomes a main staple of almost every advertiser’s media mix, Walmart Connect has rapidly innovated with new and innovative solutions. This hasn’t always been the case – traditionally, Walmart’s algorithm acted as a gatekeeper for advertisers trying to competitively target different categories and products. This narrowed the range of potential ad placements across the network, making it hard to get in front of consumers who weren’t specifically shopping for your product and making it expensive to buy ads that got the results that mattered.
As of January, Walmart’s brand term targeting solution changed all of that and is now available for Sponsored Products, Sponsored Brands, and Sponsored Videos. With this new targeting capability, brands can target audiences with any search keyword and category as long as it’s relevant – getting ads delivered at the top of relevant searches.
There’s even more flexibility when it comes to customizing the product page experience with Walmart’s Variated Detail Pages: you can display items with similar SKUs that have different colors, sizes, flavors, quantities and other variations. With a new way to get in front of Walmart.com shoppers and a way to personalize the shopping experience from start to finish, advertisers can start to make the most of their advertising dollars with Walmart Connect.
And the data backs that up.
Adding Walmart to Your Media Mix
Pacvue data shows that there are two major things to consider as you roll out a new media campaign on Walmart: the category purchases based on device and the pricing of ads compared to Amazon.
Here’s what our data showed:
Soft Lines Ad Spend (Bedding, Curtains etc.)
- Walmart App: ~ 65%
- Desktop: ~ 15%
- Mobile: ~ 20%
Food & Beverage Ad Spend
- Walmart App: ~ 82%
- Desktop: ~ 10%
- Mobile: ~ 8%
Most importantly, when it comes to performance, advertisers should be paying attention. Walmart wins every category:
- CPC is 55% lower than Amazon
- CTR is 3X higher than Amazon
- ROAS is 25% higher than Amazon
What all of this should tell us is that Walmart Connect is just getting started. Audience growth and advertising solutions growth are following hand-in-hand. And, with a more dynamic and competitive ad marketplace, advertisers should pay attention. Walmart is a fast-growing ecosystem with an efficient and effective ad inventory that gives advertisers of all sizes a chance to drive incremental sales and build a new customer base on a new channel.
Want to get started? Book time with Pacvue’s team of retail media experts to learn more.
