Walmart is the biggest and (quite literally) bluest retailer in the US, minting hundreds of billions in retail sales and making billions in digital advertising revenue.
In the eyes of advertisers, though, it still doesn’t hold a candle to Amazon.
Even though Walmart has made strides growing its retail media platform, advertisers are still warming up to Walmart’s capabilities this holiday season, media buyers told Marketing Brew.
“Walmart has not been the place where brands are focusing their e-com dollars,” Ryan Dietrich, SVP of e-commerce, retail media, and technology at the agency Monks, told Marketing Brew. “Historically, we always told brands to treat Walmart as kind of like Amazon Canada, which means, as a rule of thumb, 10% of your Amazon US sales.”
Though media buyers say the company’s retail media network has considerably more upside in recent years, Dietrich said Walmart still has ways to go before it makes a dent in Amazon’s retail media market share.
‘A long way to go’
In many ways, comparing the two retailers’ retail media platforms is a bit like comparing apples to a diamond-studded orange.
Amazon’s advertising business posted revenue of $14.3 billion last quarter. Meanwhile, Walmart’s retail media business brought in around $3.4 billion for the 2024 fiscal year.
Slowly but steadily, though, Walmart is expanding its retail media footprint. Its US ad business, Walmart Connect, grew by roughly 30% in Q2 and 26% in Q3, according to company earnings reports.
“We’re getting better at converting someone who may just be eyeballs looking at our website to actually completing a checkout and putting something in their basket and having that delivered to their house,” Walmart CFO John David Rainey told investors this week. “We’re pleased with our progress, but it also indicates we still have a long way to go.”
Talk about an understatement. Overall, roughly 180 million Amazon customers in the US have Prime accounts, according to Consumer Intelligence Research Partners data cited by Bloomberg in April. Walmart+, Walmart’s subscription shopping offering, had roughly 8 million subscribers as of last year, according to the Wall Street Journal. And while Amazon was the No. 4 most-visited website in the US in October, according to SimilarWeb, Walmart was No. 19.
If any company is going to challenge Amazon, though, one might expect it to be Walmart, which has looked to set itself apart in the crowded retail media category where brands from Kroger to United Airlines are vying for advertising budgets.
“Walmart is the only real challenger, and it’s a distant second,” Sky Canaves, a principal analyst at eMarketer covering retail and e-commerce, told Marketing Brew.
Making moves
In 2021, Walmart made a splash on Madison Avenue by partnering with The Trade Desk. The partnership married Walmart’s own data to The Trade Desk’s programmatic ecosystem, helping advertisers find potential Walmart customers across the internet, and while this helped attract advertisers out of the gate, it also means Walmart doesn’t own those ad tech pipes.
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When asked about the retailer’s deal with The Trade Desk, Walmart spokesperson Julia Thornton told Marketing Brew that Walmart doesn’t “disclose financial arrangements with our tech partners. However, as it pertains to our advertisers, we honor transparent pricing.”
As Amazon has pitched its own DSP, it has grown into a more formidable player, Mike Feldman, SVP and global head of retail media at VaynerMedia, told Marketing Brew. The industry seems to agree, with Digiday reporting earlier this month that typically large advertisers have found lower fees and CPMs on the platform compared to competitor DSPs. The DSP is also the only way to programmatically buy inventory on Prime Video.
“Amazon sort of took their lumps…it’s certainly a lot better, and it compares a lot better to [something] like The Trade Desk,” Feldman said.
Dietrich said many brands aren’t clamoring to promote products that aren’t already on Walmart’s shelves, while Amazon’s inventory, of course, is seemingly endless. “If your brand isn’t in store in Walmart, you aren’t over-indexing,” he said.
Dietrich said he advises retail brands to advertise on Walmart to reach the retailer’s own brick-and-mortar shoppers who have turned to its online offering, not to reach Amazon shoppers elsewhere online. Walmart has shared with buyers that 80% of Walmart.com customers visit a physical Walmart store within a week of visiting the website, he said.
That means that, at least for some brands, Walmart isn’t siphoning many ad dollars away from Amazon. Dietrich recommends advertisers allocate budgets for both, since there’s such a significant overlap in customers, he told us. “This is not a platform I’d redirect Amazon dollars to,” he said. “It’s a platform that deserves its own investment.”
This holiday season, there are some other potential bright spots, including Walmart Creator, Walmart’s creator affiliate program, introduced in 2022, which has attracted interest from advertisers, especially among more cautious brands that are wary of TikTok and are already spending on Walmart, Feldman said.
“I’m shopping that deck around to anyone that wants to do it, because I think it’s a slam dunk,” Feldman said.