Why Walmart’s Latest Battlefront With Amazon Is Ad Sales

Amazon has made significant strides in the ad sales game in the past few years, and now Walmart wants to get a bigger share of the pie.

The Bentonville, Ark.-based retailer announced Thursday that it would acquire the advertising technology startup Polymorph Labs, an investment the company says will help it deliver more relevant digital ads to customers. The move bolsters Walmart’s growing in-house advertising business, Walmart Media Group, and comes just a few months after it consolidated advertising sales for its stores and websites. Now suppliers deal with a unified team when they want to spend on marketing across the retailer’s channels.

Walmart still has a long way to go if it wants to come close to Amazon’s scale in terms of advertising: The Seattle behemoth ousted Microsoft from its third-place spot on the list of the country’s largest ad platforms this year, commanding 4.1% of the market. (Google and Facebook, of course, account for the lion’s share of digital ad dollars at 37.1% and 20.6%, respectively.)

By contrast, Walmart CEO Doug McMillon said at an investor day in October that the company’s ad business was “tiny” and “could be bigger,” particularly if it can monetize its data.

The Polymorph acquisition will make it easier for companies to buy ads with Walmart, thanks to new technology like a high-speed ad server, a self-serve interface and server-side header bidding. Advertisers will be able to have more control of their spending, target specific segments of customers and view analytics about ad performance.

They’ll also have the opportunity to reach hundreds of millions of potential customers: About 300 million people shop at Walmart stores every month, according to Forrester Research, and Walmart.com gets more than 320 million monthly unique visitors, per market intelligence firm SimilarWeb.

Amazon still has the upper hand in terms of web traffic, garnering five times as much traffic as Walmart over 12 months, according to a 2018 study, but if the stalwart brick-and-mortar chain’s impressive digital growth is any indication, it’s prepared to put up a fight.

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