Walmart is experimenting with video ads on Walmart.com, one of the new updates coming to its ad business that it revamped with the launch of an on-demand platform last year. Meanwhile, Walmart is also changing the way it sells ads in online auctions, implementing a second-price model, which is a more transparent way to reward advertising space, something brands have asked for.
Rich Lehrfeld, senior vice president and general manager of Walmart Connect, announced the new features in a blog post today. Lehrfeld talked about the new video ads that would begin appearing on Walmart.com before the end of the year; it also announced new measurement capabilities for marketers to analyze the effectiveness of their campaigns and the expansion of the automated ad platform to more brands.
“We’re making it faster, easier and more efficient for brands to launch and manage display campaigns on Walmart.com on their own,” Lehrfeld said in the blog post. “We recently launched Display Self-Serve to our first phase of advertisers, giving them more speed, flexibility and control with their display campaigns.”
Walmart is building its retail advertising network, an online ad ecosystem that combines its data from 150 million shoppers with targeted ads, both on and off its website. Last year, Walmart launched an on-demand platform with The Trade Desk. In February, Walmart announced its ad revenue for the first time, which reached $2.1 billion in the fourth quarter of 2021, as the retail giant is competing in the growing retail media space. Amazon is considered one of the most sophisticated retail media and advertising platforms on the Internet, and several rivals are following suit.
“There’s been a lot of buzz in the retail media, as you know,” Lehrfeld said in a recent phone interview, in which he described the platform’s upgrades. “It is revolutionizing the advertising industry.”
Walmart ads have attracted many consumer product brands and other marketers who are strong sellers in Walmart stores. Walmart also released a case study on Bic razors, showing how the brand used the demand-side ad platform to target recent and “probable” customers.
Walmart is still a nascent ad service without all the automation and auction dynamics that attract online advertisers. But in the coming months, Walmart plans to launch second-price auctions, which reward online ad inventory based on the second-highest bid in the auctions. This means that if a brand bids $10 per 1,000 online impressions, but the second-highest bid is $5, the brand that bids the highest will essentially pay $5.01. The auction is considered fairer because the winner understands more about the other bids based on the winning price – the advertiser is not in the dark about whether they outbid. The second price is also more economical.
Advertisers want more transparency from Walmart as the ad platform evolves, according to several advertising executives, who spoke on condition of anonymity. “We’re seeing significant budgets shift for Walmart,” said an advertising agency executive with retail media experience. “But there is still skepticism and a desire to test it.”
Walmart is making updates to the platform to be more friendly to ad agencies and programmatic ad buyers — the types of advertisers that use automated ad services, those advertisers said. Walmart offers the ability for brands and ad agencies to bring their data to target customers with ads, similar to Amazon and others, but is still developing additional data services. Lehrfeld said Walmart is working on “clean room” technology, for example, which is a data service that many internet ad platforms offer, where brands can analyze encrypted data. The data is more private, but still offers insights for brands so they can build audience segments and measure campaign results.
Walmart is developing “new ways for marketers to engage with customers while shopping,” Lehrfeld told Ad Age. Video is one of the new ways to showcase brands on your own website. Walmart currently delivers video ads off its website through the demand-side platform run with The Trade Desk, which also reaches connected TV, but Walmart wants to run videos on its property.
Meanwhile, Walmart also wants to link web ad campaigns to in-store activations, giving more online advertisers the ability to run sample in-store promotions or appear in out-of-home ads on store screens.
Walmart also announced that Jungle Scout, a shopper analytics and sales platform, would become a marketing partner. Jungle Scout already works with Amazon’s ad platform.
Lehrfeld said Walmart wants to give advertisers the ability to “find the right expert they choose to help scale and automate search campaigns.”
Lehrfeld said Walmart’s updates were part of its strategy to appeal to more brand budgets, with more upper-funnel goals that drive awareness of its products, as well as creating more automation for performance goals, which lead to direct sales.
“We will continue to roll out the DSP to more advertisers,” Lehrfeld said, “helping brands reach customers across digital media.”
Translated matter from AdAge.
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