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The Current

News for the modern marketer

Edition 3

Walmart connects the dots

Friday, January 29, 2021

The main headlines in the marketing world this week come from Bentonville, Arkansas. Walmart unveiled an expanded vision and rebranding of its media business, now called Walmart Connect, with the aim of becoming a top 10 advertising platform within the next five years.

Previously known as Walmart Media Group, such bold ambitions aren’t usually made by companies that sell everything from bananas to Wrangler jeans, though Walmart is an exception.

And why is this such a big deal? Like almost everything these days, it’s all about data.

The world’s largest retailer has revenues twice that of Amazon, a massive physical footprint and a veritable treasure trove of shopper data. It’s also among the most visited websites in the world and has a booming ecommerce business.

The company plans to couple its shopper data with its very own demand side platform, or DSP, thanks to a partnership with The Trade Desk. This means marketers can leverage their own first party data, as well as Walmart’s shopper data, within a new DSP powered by The Trade Desk for media outside Walmart’s owned properties. Availability for the Walmart DSP is currently slated in advance of the upcoming holiday season, the company says.

“We’re pretty confident that we’re going to be able to grow this business to become one of the top 10 advertising platforms in the U.S. over the next few years,” Walmart Chief Customer Officer Janey Whiteside said in an interview today with CNBC, adding that the retailer’s massive physical footprint is a major differentiator. “If somebody sees an ad online and later buys that [item] in the store a day, a week, later, we can connect that together ... which historically, advertisers haven’t been able to get.”

The move instantly makes Walmart a legitimate contender in the advertising arena. Marketers can, for instance, tie back their ad spend to purchases made either in store or online — an advantage none of its rivals own. When coupled with its purchasing behavior data from its 150 million weekly shoppers, Walmart can offer advertisers an extraordinary view as to what products consumers buy at scale.

Marketers will also be able to create much more relevant and measurable advertising campaigns, across all advertising channels. Additionally, they can iterate those campaigns on the fly, based on changing circumstances and real-time in-store performance.

This creates an incredibly powerful “closed loop system,” the company says. CPG advertisers can, for example, track and analyze their efforts from the first touchpoint — say, a digital ad — all the way through to point of sale.

“By connecting the dots and closing the loop — from ad purchase, to consumer purchase, to look-a-like modeling, to repeating the process — the brand’s media sales are optimized to sell more product at Walmart,” Jeff Green, cofounder, and CEO of The Trade Desk, told The Current. “They are now getting more insights than ever.”

Having such granular measurement capabilities is also “another tally in the win column for the open internet,” Green added.

"All major media companies are aligning themselves for a future that is streamed."

- Tim Sims, Chief Revenue Officer, The Trade Desk

Just briefly —

  • The way we watch TV is evolving toward a future of streamed content. Find out why The Trade Desk’s Tim Sims believes the idea of a one-size-fits-all nationwide ad may be over, and why that’s good news for marketers.
  • If you’re baffled by ad-tech alphabet soup, or sick to death of esoteric acronyms, we’ve got the solution for that header-bidding ache. It’s our new series called ‘What the Tech.’ Read on and feel better.
  • Making sure purpose is connected to a company’s DNA is critical, Unilever’s Debora Koyama told The Trade Desk. What’s more, it drives growth. Read the full conversation.

Brick-and-mortar retailers extend their reach

For decades, major US retailers like Walmart, Kroger’s, and CVS achieved scale and reach via an archipelago of brick-and-mortar mega-stores across the land. But now, the concept of the retail store is transforming yet again to reflect a new digital marketplace — to become even more mega — as ecommerce sales rocketed skyward during the pandemic.

Here’s a figure: 37 percent. That’s the increase in retail ecommerce sales for the third quarter of 2020 compared with the same period in 2019, according to the US Department of Commerce. As a comparison, total retail sales increased 7 percent in the same period. With that kind of online traffic, it’s no wonder major retailers are keen to monetize their digital platforms by attracting ad dollars.

It’s a shift that has been underway for a while, it’s just getting faster after the catalyst of last year.

Amazon, of course, still claims the lion’s share of ecommerce channel ad spending – around 75 percent — but the next wave of ecommerce power players is poised to challenge this dominance. Major retailers — from CVS to Kroger’s to Target — are making this shift, extending their reach as media networks in their own right.

Marketers will spend nearly $23 billion dollars this year on advertising on ecommerce sites and apps this year, according to eMarketer’s first forecast of ecommerce channel ad spending. That’s an almost 30 percent upswing on last-year’s already accelerated figure.

It’s a market that looks set to double in the next four years.

Around the dial

  • Post-cookie identity: Investor’s Business Daily takes stock of the scramble to replace the cookie. Who stands to gain; who stands to lose?
  • Whassup with that? Big brands like Budweiser, Coke, and Pepsi are sitting out the first Covid-era Superbowl, reports the Associated Press.
  • What the FLoC? Google’s solution to replace third-party cookies — FLoC— raises a few eyebrows among industry ad tech leaders, AdExchanger reports.
  • Google on Apple IDFA: AdExchanger also reports that Google acknowledges a potential impact to ad revenue on iOS once Apple’s IDFA changes take effect.
  • Big step for Unified ID 2.0: On the heels of last week’s PRAM news, the IAB Tech Lab reports that "Unified ID 2.0 is on its potential path to be managed and operated by independent, objective third parties."
  • RTL sees ad bounce: Europe’s largest commercial TV group sees impressive growth for its online streaming services and ad revenue uptick, according to The Hollywood Reporter.

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