Walmart follows Amazon into an online advertising battle

Image: Joe Raedle/Getty Images

As the industry buzzes about Amazon’s growing advertising power, its arch-rival is trying its best not to be outdone.

Walmart is now quietly bulking up its own online ads business, according to a recent research note from KeyBanc analyst Ed Yruma. Whereas the retailer previously used space on its site mostly for its own promotions, it’s now increasingly selling it to other brands and vendors.

Walmart’s already tapping into the same sort of cocktail that’s made Amazon such a potentially formidable force in the ads world: a valuable trove of data on customer shopping habits. The big-box retailer is now also plugging in information collected on in-store sales to give advertisers a fuller picture of the customers they’re targeting.

The move comes as Walmart’s e-commerce operation continues to grow at a rapid clip under the guidance of Jet.com founder Marc Lore, who’s now the shopping giant’s head of online sales. Lore’s focused much of his energy on building out the site’s tech capabilities and integrating Jet.com’s proprietary algorithms.

While advertising has remained a relatively small part of these efforts, Walmart is now offering a full range of options for advertisers, including display placements, programmatic ads (those placed by an automated exchange), native ads (sponsored product listings that a given brand pays to make more prominent), and physical in-store ads.

Some of its ads will even trace the shopping process from searches on the Walmart site to purchases of the same product in a store.

Mockups of Walmart native ads (left) and display ads (right).

Image: walmart

As always, Walmart is trying to use the extra capability afforded by its thousands of stores to balance out some of Amazon’s technical superiority.

Meanwhile, Amazon has built its own advertising operations into a billion-dollar business, and it’s expected to grow to more than twice that by 2019. Advertisers are interested in what Amazon has to offer because consumers are increasingly starting their search for products there, rather than on Google.

Walmart doesn’t have quite the same synonymity with online shopping as Amazon does, and, while neither company breaks out advertising numbers specifically, it’s safe to guess that the online shopping juggernaut’s ad revenue dwarfs that of its smaller competitor given the size of their respective e-commerce outfits.

Still, Walmart’s online shopping sales are growing fast, and if it hopes to be the serious threat to Amazon it’s positioning itself as, advertising is just one more arena in which it must do battle.

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