Walmart’s eCommerce business has grown 87% over the past two years, but how to incorporate Walmart into your paid media strategy? Join Pacvue and Rise Interactive to learn whether or not you should expand to Walmart advertising.
Summary
We all know how Retail Media has exploded in recent years, but did you know that Walmart’s eCommerce business has specifically grown 87% over the past two years?Walmart has continued to invest in its online paid media offerings, opening up more opportunities for brands to convert customers but also revealing more competition on the platform. In this webinar, Pacvue and Rise Interactive uncovered: The importance of expanding into Walmart, how to incorporate Walmart advertising into your paid media strategy, tips for campaign structure, optimization & reporting, and how to launch your first Walmart Ads campaign.
Key Takeaways
- Walmart had the second highest sales growth in 2021 (below Etsy)
- Consider expanding your strategy to Walmart & other marketplaces to take advantage of current growth and competition in the industry
- Prioritize a Marketplace mix and align them to your target audience
- Understand your product performance on Amazon—both SOV and competition—to inform Walmart advertising expansion decisions
Transcript
Jeff Millan
Okay, it looks like people have slowly stopped joining, so we can kick things off today, I’m seeing a lot of familiar names in the attendees list. So welcome, everybody. Today’s webinar is the million dollar question, Should you expand to Walmart advertising? This is a question that’s come up a lot over the past two years with the rise of retail media, so we’re excited to dig into the question today with our friends from Rise Interactive. And just a reminder, this webinar is being recorded and will be sent out later today… So we’ll do some brief introductions. I’ll start out by introducing myself, and then I’ll let the Rise team introduce themselves. I am… My name is Jeff, Millan, I’m a Senior Account Executive here at Pacvue, before Pacvue I spent two and a half years at Walmart connect, helping brands and marketplace sellers build strategic media plans to drive more sales at Walmart. And I’ll let the Rise team introduce themselves.
Blake Kidd
Hi folks, my name is Blake Kidd, I’m the Director of Marketplaces here at RISE. So myself and my team are responsible for all of our marketplaces, strategy implementation, and all that good stuff. I’m based out of St. Louis Missouri, I’m a huge Cardinals fan, which puts me somewhat at odds with my Chicago-based team, but we work through it. Like any good baseball fan, things I care a lot about are good metrics, good statistical significance, good testing opportunities, so I hope to dig into some of those topics in the context of Walmart today.
Mina Salami
I’m Mina Salami, I am Blake’s colleague who does reside in Chicago and am a Cubs fan, but I am associate director of partnerships here at Rise. I manage our strategic partners such as Pacvue, making sure that we’re bringing innovation and the best talk to our clients. Prior to that, I was on the account side at Rise, leading one of our largest retail clients.
Jeff
Alright, so why are we here today? Walmart’s business is growing fast with e-commerce sales increasing 87% over the past two years, and advertising sales increasing 240% in the same time period, we know their ad platform is growing quickly and it’s opened up a ton of growth for brands, but brands are sometimes hesitant to add Walmart to their strategy due to a couple of things, one is not having enough knowledge of the platform. Two is time and staffing constraints and three, we’ve noticed people not really knowing how to scale the platform and the differences between what they’re familiar with on Amazon. So today we’re gonna try and clear up some of those hesitations, so for the agenda, Rise is gonna kick off today’s webinar with their approach to multi-marketplace advertising, then we’ll cover why you should expand to Walmart, How to get started, as well as a few key takeaways if you have any questions, go ahead and add them to the Q&A box, and we’ll get to them at the end of the webinar.
Mina
Awesome, so yeah, I’m gonna kick us off with giving a little background on who Rise is and then talking about our pro to marketplace advertising. So Rise Interactive is a digital media agency, we’re global, headquartered here in Chicago. We service our clients across all digital marketing channels, and we really have this philosophy of interactive Investment Management, and what that means is that we look at our clients budgets as a whole and really try to push the best investments based on data. And looking on the next slide, and how we drive growth for our clients, again, we cover all the various channels that require our clients to have the best digital marketing strategy, and with that further we build Connex, which is our media optimization platform, essentially it aggregates all data from all these channels, including marketplace data that will be funneled in through Pacvue and our partnership with them, and back when Amazon actually came out with advertising and marketplace advertising in 2012, we were one of the first three agencies to be accredited, so we’ve really spent the past decade delivering our media expertise for this channel, as well as the various other channels that have been around for quite some time, and in looking at specifically the last year and a half, and coming up on two years now, and looking at some of the stats that we were able to drive for our e-commerce clients, obviously, we helped grow their revenue, which a lot of e-commerce brands have seen the past couple of years, but what’s really key that we pride ourselves on and helping our clients is that reduction in cost. How we’ve been able to do that is through some of that integrated strategy and vision that we have as well as specifically when we look at our clients that we’ve brought on to Walmart, we were able to see those lower costs, and we understand that when we look at the marketplace advertising space, it’s very complex, it’s very similar to just in general digital marketing space, and what we do is try to stay ahead of that innovation and stay in the know as well as use a few different methodologies around how to prioritize and expand to additional retailers and marketplaces for our clients…
So one of the first things that we look at is audiences, obviously, we wanna look at the psycho-graphics and demographics of these various marketplaces and retailers, and also mapped that back to our clients target audience, and even looking at if your audience isn’t necessarily 100% aligned to Walmart, for example, we do look at some of these other factors where we find the opportunity score on where it would be optimal to expand to, and we’ve really found in the past six months to a year that a lot of those opportunities do lie in Walmart and that’s kind of where the next section I’m gonna hand over to Blake, who’s gonna talk about why Walmart and some of those components.
Blake
Thank you, Mina. Our mission statement is, should you expand to Walmart? Our blanket answer is going to be, Yes, it’s definitely been at the top of our priority list for most of our clients over the past year, and we found great success with doing that, but we know that the various reasons for expanding are gonna hold more or less weight according to your brand. And so we wanna outlay a few of the arguments for why we would consider expanding to Walmart and a few of the tests you might apply to your current Amazon account that might suggest whether it’s a good or a bad time to expand to Walmart and where you’re gonna find the best success.
So this section is a four-part section in terms of the arguments we think are most persuasive, the first one is endemic Walmart, it’s Walmart’s growth that we have a few more statistics to share about that, the other three are actually tests you can apply to your current Amazon campaigns, the competition you’re seeing in Amazon’s share of voice, you’re achieving on Amazon, and whether you’re seeing any dimension returns on Amazon, they’ll actually help you really hone in on what keywords, what products you’re running today in Amazon, those are all really great opportunities for expansion into Walmart. So the first one would be Walmart’s growth, and Jeff touched on this right at the beginning of the presentation. But this, I think is the most persuasive, specific Walmart argument for why expansion is important right now. I know he led with overall growth on Walmart is really fantastic across the board, we actually wanted to put a finer point on that with just our Rise portfolio data on the next slide. So this is just using our Rise portfolio clients and looking specifically at the most recent data we have, which is Q4 compared to Q3 of 2021, and we’re able to see that among our portfolio, Walmart outpaced Amazon’s growth, quarter-over-quarter, 63% clicks increase for Walmart compared to 12% for Amazon. That itself is pretty remarkable. But even more so when you consider another kind of aspect of that, which is shopping holidays in particular, Amazon normally dominates on those, we actually saw for our Cyber week last year, that Walmart also outpaced Amazon for that too, having plus 70% week over week clicks for Cyber Week compared to Amazon only plus 20%. So both in a macro sense and also in a minute, very specific shopping holiday, since we’re seeing Walmart are to outpace Amazon’s growth members.
Jeff
So some of this growth is just due to Amazon slowing down and an overall overwhelming number of shoppers heading to Walmart as a second choice, so in this latest study that we see that we are looking at 62% of responses and said the next most common place they shop outside of Amazon, is Walmart. So looking at some of the data from Pacvue’s advertisers, we’ve seen that ad spend on Walmart has increased 12% quarter over quarter, and 327% year over year, and during the same time period, Walmart return on ad spend has increased 7% quarter-over-quarter and 68% year over year. And on the opposite side, Amazon, as Amazon’s return on ad spend has increased about 1% quarter-over-quarter, and it’s actually down 6% year over year for sponsored products, so with the increase of shoppers to Walmart and it being a new marketplace, advertisers who are active on that channel are seeing the strong returns to match.
Blake
I wanna point out just how remarkable those numbers are, especially in the year-over-year sense, when platform spend is more than quadrupling and getting more efficient, normally you don’t see those two together, you’d expect with so much extra influx and spend things to get maybe a little bit less efficient in the meantime but we’re actually seeing not only more spend, but much more efficiency, which I think is very remarkable. So that being said, I think the best argument to be made on the Walmart side, the three sections will be, again, things you can apply and integrate on your own Amazon account to see specifically what makes sense to expand, and the first one will be the competition that you’re seeing on Amazon, so the first thing I recommend is leveraging Pacvue’s platform to actually access their competitor monitoring tools or some similar program like that to make sure you’re keeping an eye on the competition that you’re seeing on various keywords and products. Basically, you can sort the data in any number of ways, I think is one of the most common ways to do so, which is basically a week over week stacked bar chart, every color here is going to be a separate competitor, and you’re looking at the sponsored products share of voice, or a week-by week.
And basically what I’d recommend you do for your brand is that you pick out a handful of non-branded keywords that are really important to your brand, either in terms of the number of sales they drive or the number of clicks they drive, and monitoring those over the course of two to three months. And basically what you’re looking for is whether the share of voice for those keywords is starting to be consolidated from a lot of competitors to just a few competitors, that’s somewhat what’s happening in this image that you can see there, if you look at the dark blue and the light blue colors on the bottom of those stack bar charts, those are individual competitors, over the course of these five weeks, they’re eating up more and more of the share of voice and other competitors are being prodded out. Normally, what that means is that’s bad news for your CPC in the near future, if two or three competitors are trying to dominate most of the scene, that usually means your cost per clicks are about to go up, which is typically bad for your return and also your conversion rate may start to suffer in the future as well as these very large competitors become more and more ubiquitous, so basically, if you identify any kind of keywords that are seeing this pinch in competition, those are great opportunities for expansion to Walmart and escaping some of this very tight competition on Amazon.
The other thing that plays into that is not only will you be avoiding the higher CPC on the Amazon side, but we also have data from Pacvue to suggest that CPCs themselves are actually lower on the Walmart side as well, so this is data we can see Q4 2020 and also the last two quarters of last year, Walmart being in blue, we’ve seen those CPC started out above Amazon, but have decreased in all of those quarters and are now below Amazon’s overall, that I think is really remarkable and also suggests to, the stat we called out at the beginning, where we’ve seen a great reduction in our portfolio of CPC, this is a big reason why we’ve actually taken advantage of the cheaper CPC’s available on Walmart.
Jeff
And I’ll hop in here and just say that one of the reasons that we’re continuing to see cheaper CPCs on Walmart and brands are able to spend more and see how it returns on Walmart, just Walmarts in that growth phase right now, and they’re adding more and more ad placements throughout the year, and they’re looking for ways to help out their advertisers so you’re gonna continue to do see growth where Walmart has to catch up to Amazon and add more ad placements.
Blake
The second test that I think you should apply to your Amazon account will be the share of voice you’re currently capturing. So I know we alluded to it a little bit in the competition section, but share-of-voice is essentially a metric, it’s a percentage that is describing of all of the searches that are out there for a particular keyword, what percentage are you showing an ad for, what percent are you showing up for… So if you had, for instance, 90% share of voice for a particular keyword, that means of all of the searches for that keyword, you’re showing an ad for 90% of them, that is I think, one of the top two metrics that any digital marketer needs to understand. It’s actually just been released by Amazon about a year ago or so, so these are custom reports you can pull on.
Next we can do some testing here to also identify whether keywords might be good candidates for expansion to Walmart, you imagine you’re a competitor that’s running these five keywords here, and you’re trying to inform your decision of where your next dollar is going to be spent, where is your best investment right now, you might first focus on something like “No lace running shoe”, that keyword in the middle of the table there, or “women’s Red tennis shoes”, those are keywords that have pretty great returns, four and a half to almost $5 returns is pretty good compared to the alternatives, the issue is they’re almost completely maxed out in terms of their share of voice, they’re at 80 and 90% share of voice. That means that you’re almost capturing all of the searches that are currently being search, you’re almost representing that every time someone is searching, so even if you want to push more spend there, even if the performance is great and you would like more spend there, there’s simply nothing left to capture on the Amazon side, the juice has all been squeezed, so if you want extra volume on a keyword like no lace running shoe, the answer could be very simply expanding into Walmart for more volume.
The second scenario that is probably a little bit more common, well, something like the keyword on the bottom of the table, something like “trail running shoe, soft soul”, and this is also a keyword that’s performing great. And it looks like share voice is not currently maxxed out at about 60%, there’s still headroom to grow there. The key is fundamentally, as you get towards the higher end of the heroic scale, it becomes more and more exponentially expensive to increase your share of points, and that’s the key consideration you need to make…
So I put another way, moving from 60% share of voice to 70% share of voice is much, much, much more expensive than moving from, say, 10% share of voice to 20% share of voice… And so what that means is, even though the current performance on this keyword, trail running shoe, is doing really well right now. The question is, is it gonna be more efficient for me to move from 60% share voice in Amazon to 70% share on Amazon with how expensive an increase like that is, or is it gonna be more effective to move from 0% to 10% on Walmart, and that’s the calculus that needs to be made there. We call it diminishing returns in calculation, whether you’ve pushed as far as you can… As far as you should push on the Amazon side, so for some of those keywords, like I mentioned, 80-90% share voice, you may be pushed as far as you can… Something like the bottom example is a little bit more nuanced where it’s how we pushed as far as we should and now we should start looking to expand to other marketplaces.
So we actually go into that a little bit more in the next section, which will be the diminishing returns section, so basically this is trying to say, Hey, of all my Amazon keywords, are there any where I have pushed as far as I should and now I should start considering expanding to Walmart as a cheaper and more cost-effective alternative, and we can do this actually divorced of any kind of share of voice. There are other metrics that we can look at to make that determination. Well, the next slide, we have a screenshot from our platform Connex that Mina alluded to earlier, where you basically have three keywords, this is all data from month over month, so this is December versus November of last year, and basically we can see the CPC changes that we did a month of run for each keyword, the revenue, the incremental revenue we got, and how that affected our return on ad spend. So the first part, I think is a really clear example, this is a cure where we had a huge increase in CPC, we more than doubled our CPCs a month over month, but for all of that pushing, we’ve only got an additional 7% revenue month over month, and our ROAS therefore, dropped about 46%.
This to me, is a really classic example of a keyword being maxed out, I assume if we look at the share of voice for this keyword it would probably be about 90%, we pushed as hard as we possibly could, and there was simply no juice left to the squeeze. We only got 7% additional revenue. So this would be a keyword, I think it’s a very clear case for expansion into Walmart. The second keyword is a little bit more nuanced, we also had a huge CPC increase here we increased by 80% month over month, it’s very large, and we did drive a lot more revenue month over month. We drove about 57% additional revenue that seems pretty great. The key is it took a proportionately higher increase on CPC to drive a proportionately lower increase on revenue, so we talked about 25% ROAS month over month, and that’s totally a trade-off that I know a lot of advertisers should be very happy to make 60% more revenue for 25% lower ROI, that can absolutely be worth it, depending on your goals. But the key is, we’re now seeing it take proportionally higher pushes on the CPC to get proportionately lower revenue increases, you’re approaching diminishing returns, and you may wanna start thinking about, is my next best dollar spent here or is it spent in Walmart?
And then the third keyword is actually, I think a more clear example of that, we had a pretty moderate increase in CPC, about 25% month over month. We only return 12% revenue. We lost 60% or close to 70% ROAS. That’s a scenario where we have to think only 12% increase revenue for a big loss on ROAS, that’s probably beyond to the point of diminishing returns that I’m willing to accept. What I’d recommend for the keyword, is spinning it down a little bit, reducing ad spend and then taking those savings and funding that keyword expanding into Walmart.
So those are a few of the areas, again, that you can test on your own accounts today and see, probably getting a list of keywords of good targets to expand to Walmart, and I would be pretty optimistic that every account here that did these tests would probably find some area where you are close to maxxed on share of voice, you’re seeing a lot of competition or increasing competition, or you’re seeing diminishing returns. I think almost every account will have instances of those that will be good candidates for Walmart expansion, but having said all that, once you identify your targets, we also know that it can be a little bit difficult to understand where you get started on the Walmart side, so we have a four-part section here as well to talk about getting started on Walmart in particular. We have an overview of our general ad units that are available, if you could jump to the next slide, we also have a starter media mix, what you can expect in terms of where you should put your budget in terms of the first few months of performance, we have a guide on how to get started with Search Term mining and the keyword builds that you’ll make, and we have a few points in terms of the custom reporting solutions that can give you a leg up.
Jeff
So I’ll hop in and answer this, what is Walmart Connect? Walmart Connect is Walmart’s advertising business, it includes a self-serve platform as well as meaning managed service offerings designed to help brands and marketplace sellers grow their business at Walmart using valuable online and in-store first-party shopper data. So we’ll dive into that in some detail on the next slide. Walmart Connect provides brands and sellers the opportunities to advertise across Walmart.com and Walmart stores, the placements available through Connect include search, on-site display, and offsite display. So if you’re looking at these placements right here in the screenshot, we have our search brand amplifiers, our Walmart product ads, and our on-site display at the bottom. If you’re advertising currently on Walmart, these are gonna look pretty familiar to you. I think the main difference is sort of the nuances and execution of how to execute these ads and be successful on Walmart and all that, Blake, dive into that.
Blake
Sure, so we have, for the most common segments you are probably gonna experience in setting up campaigns on Walmart, we have some general rules of thumb for where you probably start with budget allocation and Media Mix. A couple caveats here, obviously, these are all rules of thumb. Your mileage may vary depending on your brand and what you know about yourself, especially in the brand versus non-brand side, and then the other caveat would be… These are, I think, good starting estimates, so I think would hold for the first three or so months of your performance, and you should definitely be on that point, be iterating and pivoting your spend to where your performance is best, testing new things, all that good stuff, but this is, I think, is a good guide to start. The first thing I think we can talk about is the auto versus manual campaign. So anyone who’s advertising on Amazon right now, probably understands a good amount of auto campaigns, they’re campaigns that do not require keywords to function, you just input the number of products, and then Walmart itself will decide what keywords you should show on or what products you should be appearing on their product pages and things like that, on Amazon, you’ll probably know that auto campaigns are typically a little bit less efficient than manual campaigns, so for that reason, most Amazon advertisers, especially that we work with, usually have their auto percent of spend in the 20% range, we actually recommend a little bit more spend on the auto side, especially when you’re getting started with Walmart, and the reason for that is auto campaigns actually have a little bit farther reach than manual campaigns do, so if you’re trying to present ads on product pages, below the Buy Box for some of those carousels right now, only auto campaigns have access to those inventory slots, now that is changing, slowly manual campaigns are starting to get more and more access to that inventory, but if you want to appear everywhere that Walmart will allow you to appear, you actually have to invest in an auto campaign, so we typically recommend, again, to start a little bit less than half of your spend going into the auto campaigns, I would expect over the course of the year that that will decline and you’ll be spinning some of those dollars into manual campaigns as you get a better sense of what keywords are working, and again, as manual campaigns, the inventory levels open up, but this I think is a good starting area.
Second, on the brand versus non-brand inside, this might also look a little bit interesting to some folks, 40% spend being put in branded is sometimes a little bit higher than what brands may expect on Amazon.
I think the key is, this is definitely an expansion into Walmart level of media mix, this is not something I think would be close to steady state, and the reason I say that is when you expand into Walmart for the first time, you might find that competition is a little bit different, there’s a lot of competitors, there’s a lot of advertisers on Walmart right now that are there because they’re taking advantage of the lower competition, they’re taking advantage of the cheaper CPC, so you might find that to start… Someone else is actually conquest-ing your branded term since you haven’t been on this platform before, so typically we recommend a little bit more juice to your branded spend to try and kinda re-conquest, if necessary, some of your own branded terms and make sure that you establish a credible dominance over them in the very beginning, but again, as the year trends on, I’d probably recommend that that branded spend trend down to 20-30% or so.
On the match type side, obviously, Walmart has all the same keyword match types as Amazon, they have broad, phrase and exact. You’ll notice we actually only recommend spending on phrase or exact to begin with, just Rise personally, we haven’t found a whole lot of success with Walmart’s Broad match terms, I’m not necessarily sure if it’s something to do with the algorithm that will be tweaked over time, and we just haven’t necessarily found a great level of efficiency there, so we actually typically only spend on phrase and exact match, and then here we recommend such a greater proportion of exact match because with those tests that we outlined earlier, if you’re spending to Walmart, the chances are you are doing so because you’ve identified 50 very specific keywords that you’re trying to escape high competition or avoid share of voice capping out, that sort of thing, so we think you’ll probably have some very specific keywords in mind and that will map very well to more exact matches on the Walmart side, at least to begin.
And then finally on the page type side, so like Jeff called out, There are different ad formats that are available on Walmart, most of your spend and most of your performance is going to come from the actual search page, the in-grid placements that will probably command the majority of your spend, but there are also item level placements, item buy boxes or carousels on the item page, that can be effective too. I think this is not to suggest that you should avoid those placements, but rather you should probably index more heavily into the search grid at first and then try and pivot later on if those aren’t working.
Jeff
We got a quick question here, relevant to the slide, I think we can just answer it right now. Someone’s asking, What do you mean by the term branded spend?
Blake
Yeah, absolutely, that’s a great question. So any type of branded keyword will be a keyword that includes your brand name, for instance, if Rise Interactive, if we’re designing keywords for Rise interactive, a branded keyword would be “rise interactive digital media agency”. And non-branded keywords would not include our name, but it would be hinting at our service. For us it might be “digital media agency”, so typically what I mean by, again just to reemphasize that point, you might come to Walmart and find that since you haven’t been advertising on Walmart before, some other brands are bidding on your brand name, and we probably… That’s not an ideal scenario at all, and so you probably need to juice your branded spend at the beginning to kind of kick those other competitors off and assert yourself in your own branded terms again.
Perfect, so in terms of launching a Walmart campaign, we mentioned earlier that auto campaigns are gonna figure in very heavily, those are very easy to launch, they’re very quick to get into market, not a whole lot needed for those, so I’d really recommend leaning into auto campaigns, but for manual campaigns, your first step is going to be deciding on your keyword lists, the key thing to understand here is that I would really lean into Pacvue’s keyword research tools and the competitive monitoring tools, but you can understand that you can use those both on the Amazon side and on the Walmart side because they have slightly different functionality on both, for instance, on the keyword research side, you can use Pacvue’s research tool on the Amazon platform to see keyword trends, so which keywords are trending up in your particular industry.
Amazon publishes great trending data, so you can identify what those trends are gonna be, but then on Walmart side, you can actually plug those keywords that are trending up, plug those keywords in and see, they may be trending up, but do they have a lot of search volume today? On Walmart, and you can find the best overlap there for keywords you wanna start expanding with. And then the competitive monitoring side, it’s just like we mentioned earlier, you can use the competitive monitoring tools on Amazon to see which keywords are getting pinched and undergoing a lot of competition today on Amazon, and then you plug those same keywords onto the Walmart competition tool to see which of those keywords have little competition on Walmart, so you can go from a high competition environment, to a low or no competition environment. This could be the best way to find the keywords you want to expand with at first.
And then finally, we have a note here on reporting solutions, anyone who’s been in the Walmart platform knows that, frankly, that’s a little bit of a bare bones reporting framework, you can pull basic keyword level or port level reports, but if you want anything more custom, I definitely recommend, again, Pacvue or Connex, both of those have a lot of great custom reports or custom widgets that really I feel have given us a leg up in the last year. This is not an exhaustive list, this is just a couple of my favorites.
On the Pacvue side, they offer great day of the week reporting widgets, so basically, we all know that ad performance can really differ in e-commerce by weekday versus a weekend, morning versus afternoon versus evening, all that sort of stuff that’s pretty difficult to parse in the Walmart platform itself, but this will sell up all of that data and help you make good budget flight decisions by day of the week ad performance in that way. They also have a great widget in terms of Look at your performance by page type or by ad type, so again, this is going back to the, how much do I spend on search in grid placements versus how much do I spend on item page and Buy box ads? This, we recommend, again, skewing towards search page, but this widget would be the way you can monitor that performance between those and make adjustments as necessary.
On Connex, we offer a lot of things that really help you actualize, in my opinion, actualize your optimizations and get more of your time, that for instance, we are big believers in cost percentage reporting, so this is basically a report that kind of adheres to the 20-80 rule, that 20% of your spend drives about 80% of your revenue, basically, you wanna be making sure that any optimizations you do, any time you spend is actually hitting things that are going to hit your bottom line, probably the 20% of spend is where you wanna be focusing our optimizations because it has an outsized effect on your revenue, and then finally on Connex, we have custom spend flighting.
One thing I would really recommend, I see a lot of advertisers default into monthly budgets or monthly flights for expanding into Walmart, especially at first, I’d recommend you actually go for shorter flights, maybe weekly, maybe bi-weekly. But the key here is that you’re actually being a little bit more nimble and that you’re iterating a little bit more quickly in terms of how much spend you’re putting in and where you’re putting that spend in and just not waiting a whole month to say whether we want more or less budget here, actually being a little bit more nimble with that. So Connex allows you to create those custom flights, monitor them, how they’re pacing, how they’re performing, and be a little bit more iterative in how you spend, at least at the beginning of your Walmart expansion, so those are the main points in terms of Walmart, kind of arguments for Walmart and then Walmart expansion and set up… I’ll toss it over to Mina and Jeff for our takeaways.
Mina
So looking at some key takeaways, I think the data is showing how much Walmart has grown and has continued to grow, so obviously a huge player right now looking at considering expanding your strategy into Walmart and other marketplaces and taking advantage of this current role and competition, as well as prioritizing your marketplace mix and aligning your target audience, and then finally understanding our product performance on Amazon currently, so that looking at your share of voice and competition, similar to how Blake laid out to inform your marketplace expansion decision, and some of your strategies on Walmart…
Jeff
Alright, and some of our predictions for 2022 are that with lower CPC and increasing return on ad spend, the first-mover advantage still remains on Walmart in 2022 and leaves opportunity for brands. So you’re still early with Walmart is our prediction, and after slowly ramping up budgets on Walmart, we expect more brands to increase that spend on the platform and incorporate Walmart into a larger share of their e-commerce strategies, and we also think as pick-up and delivery will continue to grow, we find more CPG brands to launch on Walmart connect. Currently, 77% of CPG brands work with Amazon, while only 56% work with Walmart Connect, so you’ll see more scale on the pick-up and delivery side. Overall, we expect retail media to continue to grow and mature this year with Walmart being one of the biggest winners of the retail media.
So now I’ll dive into some Q&A, we have some questions that were sent before the webinar, but we have some live questions with attendees here, so we’ll answer those right now. I missed one way earlier, someone was asking, when you guys were looking at share of voice on Amazon, to tell whether or not you should move into Walmart. They asked, are you looking at organic share voice or paid share voice? I believe you’re on a paid…
Blake
For sure. So we are looking at paid specifically, and I think it was even specifically sponsored product, share of voice, and the key there is to say, if we are seeing competitors increase their paid share of voice, your CPC are probably going to get more expensive, the same is not necessarily true for organic share voice. If you see competitors growing in that, you might lose some page position or there might be some other effects be you probably won’t see CPC going up, and that’s the key thing that we want to avoid by Walmart expansion.
Jeff
Awesome, so we have another question from Ben, who I know is in the UK, so thanks for joining us, Ben. He said Walmart is notoriously difficult with onboarding sellers or verifying new accounts for six plus months, which is a big challenge to start capitalizing on Walmart advertising. Any suggestions for smoothing the onboarding process or experience, do you guys have any suggestions?
Blake
That’s a tough one. Frankly, this can be a bumpy road, especially for sellers, I think Walmart right now has just ran into a large backlog of people trying to get on the platform, and so that can definitely be painful. Frankly, I’d suggest to reach out to Pacvue because we’ve had great success, and I know that they have great connections to leverage that have helped us push a few accounts through recently.
Jeff
Yeah, so I was gonna say, from my experience with working at Walmart and working at Pacvue, I know Walmart right now is hiring massively on the marketplace side, so they’re really trying to help move out that experience, so hopefully things will be quicker in the future and we also have a great partnership with Walmart over at Pacvue. I talk with the Walmart team almost every day, so if we have a client who is trying to expand into Walmart, we do everything we can to push on our end and create those relationships. So, Ben I know you already work with us, you can just reach out to me if you’re having some issues. So another question about ad structures, what ad structures do you recommend on Walmart, one product or multi-products and an ad group, one ad group and a campaign, how are you guys building your campaigns?
Blake
Yeah, so there’s a few considerations, one would be organizing your campaigns in a way that’s good for your reporting, and one is organizing your campaign in a way that’s good for Walmart’s bidding algorithm to handle and digest. So I’ll go through those kind of separately, first of all, on the campaign structure, we typically have a pretty granular structure, which is to say auto campaigns are different from manual, obviously both in manual rate, it is different from non-branded, where possible exact match is separate from phrase match, we typically have only one product group or sub-product category per campaign, and that’s mostly from reporting, just to make sure that when we are pulling campaign level reports, we can very much understand specifically where performance is coming from, what needs more attention, that sort of thing on the end group side, that’s where some of the algorithm considerations were coming to play, so typically we do ad groups with more than one product included in them, we don’t just do one product per ad group, and we found that giving Walmart an option in which product to serve typically helps that algorithm just function a little bit more smoothly.
Now, there’s definitely a balance, and I’ll confess we have not found exactly the right number of products per ad group, but I’d say its somewhere between three and eight or so… I wouldn’t go more than 10 products per ad group. More than 10, I’d break out a separate ad group. Those are a few of the general rules. I hope that’s helpful.
Jeff
Awesome, so another question, how do you determine how much to invest in branded terms when consumers may already be searching for your brand organically?
Blake
That is an awesome question. Wow is that an age-old question that is not just specific to Walmart, that’s every channel we deal with, paid search or social or anything that is on a lot of people’s minds. Really, there’s a few specific ways that we integrate that, we do something that we like to call a branded pressure test frequently, where we actually are already spending on branded, we try and max out again in terms of share, which we try to max out in terms of branded, and we have a couple of periods where we start to press down the amount of share of voice, we capture the brand, try and lose 5% share in every week or something similar, and then we also are monitoring our total overall sales, so as we lose incrementally, 5% brand share of voice, 5% brand share of voice, We see at the point in which our total sales start to fall, and basically when we do that, we can have some confidence that, Okay, we found that 55% brand share of voice is the right method for us, that is a kind of a very general approach. You can really tailor that depending on the situation, depending on the channel
Overall, what I would say from doing a lot of these tests over the years is that it feels like branded search is not necessary, it feels intuitively like I think they’re already searching for me. They’re already purchasing organically, like Why do I need to invest in an ad, and the data actually does not back that up, usually some level of branded search is actually really important to finalizing the sale. There are definitely shoppers out there who react very positively to ads, which I think is maybe sometimes hard for us to wrap our heads around, we’re immersed in advertising and all that stuff, the late people, I think oftentimes don’t necessarily know everything about how an ad is represented they just think, Well, Walmart wants to serve. Something is relevant, here it is. So that’s a very general answer. I think for your specific scenario, we might have to design a specific test, but there are ways to get at that answer and say, I would favor more branded spend rather than no branded spend.
Jeff
Alright, thank you. A couple of more questions, popping up in the Q&A, one from Cagney here. They are asking, with exploring keyword volume between marketplaces on Pacvue, can you see volume immediately or do keywords need to be put under observation, for example, Walmart, volume for a keyword that I had previously been used on Amazon.
Blake
Yeah, that’s a good question. So most of these, especially if you’re looking for competitive insights, they need to be observation, so some of that data will not backfill, you’ll need to very intentionally build out those in your Pacvue platform and then click data on them for a couple of weeks
Jeff
And you should be able to use some of our search tools to look at search volume from a high level though, some of those tools, you screenshot it actually would be great there.
So one more question on the Q&A. He said auto campaigns are great for increased exposure, but are often significantly skewed to branded terms, which are not going to be highly incremental, and the ROAS on the extra exposure can tend to be too low. Do you have recommendations for how to leverage both Auto and manual for the same items at the same time?
Blake
Yeah, that’s fair. You know, I would push back a little bit on the assertion that branded terms aren’t gonna be very incremental, such that a little bit earlier, I think from our testing, it’s actually a little bit surprising about how incremental some branded search is. Definitely varies from brand to brand, but beyond that, I would say, especially on the Amazon side, is also very common practice to use negative keywords to try and just pair down your auto-campaigns to be more streamlined, not towards branded, because one of the biggest benefits about our campaigns is also that you’re able to mine some search terms out to them, you’re able to see what Walmart actually matched you with, or see what Amazon actually matched you with, and that may be surprising and would not have made it on to your original keyword list. And that’s most useful on a non-branded campaign.
Jeff
And I’ll say from my experience working at Walmart, when I’m pulling delivery reports for auto bid campaigns vs manual bid campaigns, I would see most of the ads being delivered on item pages or other pages, category pages, so if you look at the delivery report on Walmart auto-bid campaigns, you should get a sense of how much those are skewed towards actual item pages, which can be very incremental to you because you can be competitively completing or cross-selling or something like that, you can also use in multipliers within auto bid campaigns to serve different placements that you find most valuable. Like the Buy Box and things like that. So those are all ideas as well that I’ve seen in my experience.
And then one more question popped into Q&A, do you believe that given that a given keyword works the same on Amazon and Walmart, it seems like long tail keywords work better on Amazon and Walmart, what are your thoughts?
Blake
That’s I think a good observation, and that matches a little bit of what we’ve seen as well right now, and I think it has to do with just the maturity of the platform, I think it will change over the course of especially this year, as more traffic is processed in Walmart, but long tail terms, keywords that are more than, I’d say four keywords in composition definitely seemed to perform better on Amazon than they do in Walmart terms that are a little bit shorter tail. One or two terms on Walmart seemed to perform a little bit better right now.
Especially on the exact match side, and I think that’s just a function of A) The demographic and Walmart is a little bit older and maybe does not use specific search queries. That may just be a fundamental thing, but also there’s just been less traffic that’s flowed through Walmart compared to Amazon at this point, I think that will probably normalize a little bit over the course of this year. But yeah, that’s a great observation.
Jeff
And then someone asked what the average ROAS on Walmart advertising is… I think that’s really tough to answer from a broad perspective, it really depends on the category and then beyond the category, just the brand as well.
Blake
In general, I’d say I would expect it to be a little bit lower at the start, than your Amazon ROAS, I think you have some learning to do when you expand to Walmart or any new platform, but the key here and what we try to touch on through our presentation was, it’s not necessarily what return you’re getting on Walmart at the start that’s the important thing. It’s what return are you getting on Walmart and what would you have gotten on Amazon if you had actually just invested more on Amazon and it will probably be greater than that. And that’s the important part.
Jeff
That’s a great way to look at it too, especially for an emerging channel like Walmart. One more popped into the Q&A, how many keywords do you recommend within a campaign?
Blake
I think that also has a lot do with the product category that you are trying to stick within that campaign, I’d say to have 100 to 200 keywords per campaign is not very uncommon with us, we typically have about that many keywords. I think some people might say that that’s too many, and I think a lot of those don’t get much search volume that’s totally true, but we typically lean towards more keywords.
Jeff
Yeah don’t wanna miss a potential sale, just ’cause you don’t wanna have the keyword on there. So we’re on to the questions that were sent during the registration, some of them… I think we already answered. One was, What is the most efficient way to spend ad dollars on Walmart? Did you wanna cover that or do you feel like we already answered that.
Blake
You know, I could say briefly, I think matching the media mixed rules of thumb is important and having a little bit more brand spend at the beginning than you may otherwise have done is important, but I would also call back to what we mentioned about having flights that are more iterative and more nimble than just a monthly budget, and Walmart is really important to getting the most out of it, I’d say, plan on pivoting early and often on a weekly or at the most, bi-weekly basis, don’t wait a month to see how performance has transpired. Definitely try and be more iterative than that.
Jeff
I agree, in my experience working with customers at Walmart, I think… Yeah, the more active you can be, I know it’s hard to find the time to manage multiple campaigns, the better it is, and to not just get stuck into one monthly budget, you really… Especially when you’re first starting out on Walmart, it’s really hard to tell what your monthly budget could be ’cause you don’t know the scale or volume there. So the next question that we had was about campaign structure tips. We did sort of cover that, but did you have any more details you wanted to dive in there?
Blake
No, I think we covered that pretty well. Yeah, a mixture of reporting concerns, but also algorithmic concerns. Yeah. That covered it pretty well.
Jeff
And how does the ROI on Walmart compared to Amazon, Google on other platforms? For big CPG.
Blake
Yeah, again, I would expect it to be lower, especially at the beginning, then your comparable Amazon benchmark, ROAS, the key is, is your first dollar on Walmart a better investment than your tenth dollar on Amazon… And the answer is almost certainly for some of your keywords yes.
Jeff
Yes. And the last question that we have here, and then we’ll let you guys all go… Thanks for hanging in here. It doesn’t make sense for a manufacturer who is using a 3PL to sell on Walmart.com, to invest in advertising, and in my experience working at Walmart connect, it always makes sense for a seller or supplier to be at the bare minimum investing in sponsored products on Walmart, you don’t want to miss an opportunity to boost your items and get in front of our customer, so it’s that simple at whatever budget you can get in there and start boosting your items, and then it’s a good strategy. And we got one last minute question here,
What is your recommended time to wait post campaign launch to make significant changes? Is looking at a three-day attribution enough of a guide or should you wait more around two weeks to capture the 14-day attribution? That’s a great question. I think it does depend on your individual brand, in your individual sales cycle, so if you’re selling really big ticket items and yeah, you probably want part attribution, but I think you should be really comfortable, especially when you just expand, you just launched, I think it should be really comfortable looking at three-day attribution and making not necessarily changes with perfect information, but changes with… They’re actually good enough information, especially at the beginning, I would not wait two weeks to say, let everything come through and try and make a decision with completely perfect information, I’d say be more nimble in that… I agree about driving it into the weeds, I think rules-based optimizations can really help you out with that too.
So, that’s all we had on questions… I don’t know if we can go to the last slide. We appreciate all your guys time, it sounds like there’s a lot of questions about Walmart, how you should be working with Walmart, how you should be running your campaigns. Do you have any more questions? Please reach out to [email protected] if you’re interested in Pacvue’s advertising platform or talking with our team, and then if you want some more hands-on expertise from the Rise Interactive team, you can reach out to [email protected]. These guys, as you can tell, are super knowledgeable about advertising on both Amazon and Walmart.
Mina
Okay, thank you, Jeff. Thank you, everyone for tuning in.
