Retail Media Trend: Walmart Sees Surge in Ad Sales with Brand Partnerships

Walmart Connect Advertising Business Growth

Walmart's U.S. advertising business, Walmart Connect, saw a growth of 26% in the first quarter of fiscal 2025, as stated in the earnings report. Additionally, its global advertising business experienced a 24% increase compared to the previous year.

Overall active advertiser counts on Connect grew by almost 19% recently, according to executives on a call about the results. The number of marketplace sellers, which includes smaller and emerging brands selling on Walmart, increased by over 50%.

Walmart's advertising presence, especially in video, is expected to grow even more in the coming months. This is due to the acquisition of smart TV maker Vizio and a new agreement with Disney for streaming services.

Walmart's Ad Sales Success

Walmart continued its successful streak in ad sales last quarter by attracting a wave of new advertisers to its retail media offerings. This included a significant increase in marketplace sellers on Connect in the U.S. and a 30% rise in active advertisers on Sam's Club. A key focus for Walmart has been encouraging smaller sellers to invest in ads, which aligns with the retailer's aim of building a comprehensive ecosystem. Here, merchants can customize their marketing campaigns using internal sales data to boost sales through Walmart-owned platforms.

In an earnings report that pleased investors, Walmart's strengths in advertising were also seen in other digital channels. Their e-commerce sales in Q1 increased by 22% compared to the previous year, thanks to store-fulfilled pickup, delivery services, and marketplace gains. Walmart has raised its full-year guidance slightly, anticipating a net sales growth of 3% to 4%.

Walmart's advertising segment has been steadily growing as more consumer packaged goods brands invest in retail media, which is the fastest-growing channel in digital marketing. The growth of retail media is driven by the demand for alternatives to third-party cookies and the enhanced capabilities of network owners in areas such as measurement and programmatic buying.

Winning more dollars from non-endemic brands is a key goal for Connect this year. This includes businesses like automotive and financial services marketers who don't typically sell through Walmart. The network has taken steps to make itself more appealing to these brands.

Walmart has made a big move by acquiring Vizio for $2.3 billion. This puts them in direct competition with giants like Amazon. The deal brings Vizio's advertising solutions and over 500 brand relationships to Walmart. Vizio also has valuable data that tracks viewer habits, now available within Walmart's ecosystem. Investors have not yet questioned how this acquisition will impact Walmart's advertising strategy.

The retailer is expanding its presence in streaming, a highly competitive arena for retail media networks. Walmart recently partnered with Disney in May to utilize Connect's first-party data for more targeted and measurable campaigns on platforms such as Disney+ and Hulu.

Editor's P/S:

Walmart's advertising business, Walmart Connect, has experienced significant growth in recent quarters, driven by increased advertiser count and a focus on attracting smaller sellers. The acquisition of Vizio and the partnership with Disney are strategic moves that will further enhance Walmart's advertising presence and capabilities, particularly in video streaming.

The growth of Walmart's advertising business aligns with the broader trend of retail media becoming a key channel for consumer packaged goods brands. Walmart's success in this area is due to its ability to offer advertisers access to its vast customer base, personalized targeting capabilities, and measurement tools. The company's continued investment in technology and partnerships will enable it to capture a larger share of the growing retail media market.