Walmart: The New Media Agency

WalmartWMXWalmart’s widely revered as a retail maven, but media buyer? It’s a brand-new capability for the $473-billion company, which on Friday revealed more details about the digital marketing platform it’s developed, the Walmart Exchange (WMX).

Like Amazon, which has turned massive amounts of shopper data into monetization opportunities for brands via Amazon Media Group’s demand-side platform Amazon Advertising Platform (AAP), Walmart is harnessing purchase, loyalty and other unspecified third party data assets to help suppliers spend their media dollars.

“The big difference, in my mind, is that Amazon is primarily focused on monetizing Amazon traffic,” commented Jason Goldberg, VP of commerce strategy for Razorfish. “The advertisers on their platform are often not vendors selling through Amazon, and the attribution of that media is exclusively direct-response clicks.”

Walmart, too, is monetizing audience traffic but seems to be eyeing media, initially, as a means to drive more sales for the retailer. Consider a brand like Tide, which following a brand campaign might wish to measure and track offline sales performance at the SKU level for its High-Efficiency detergent in specific geos.

Although other companies like Datalogix and Dunnhumby specialize in online-to-offline measurement, and other retailers like Tesco and Staples have invested in “innovation labs,” Walmart’s intent to develop media and marketing optimization services essentially makes it a media agency.

“I think Walmart believes that many of their suppliers are still very early in their digital marketing evolutions, [and that supplier partners could] benefit from Walmart’s scale,” Goldberg said. “One of Walmart’s unique advantages is they can help their partners attribute digital marketing to in-store sales.”

For media buyers, using data to reduce campaign waste is an especially enticing proposition. WMX, according to Krista Lang, SVP and executive media director at independent agency 22squared, should help suppliers gain more insight into performance in order to better optimize against their targets.

“This definitely emulates Amazon’s efforts with the Amazon Advertising Platform, and both retailers have similar goods and large scale, with Walmart online sales growing rapidly,” she said. How rapidly? Walmart’s sales growth online surpassed Amazon’s for the first time last quarter, increasing 30% to $10 billion (Amazon’s grew 20% to $67.8 billion) according to the Wall Street Journal.

But some of the details around Walmart’s media targeting and optimization platform are still unclear. What third-party data sources will Walmart use? Has Walmart built or partnered with a data management platform? Either way, diversifying datasets will be key.

“WMX will need to partner with additional data sources like Rentrak and Nielsen, as well as other data sources in market to ensure they can bring a holistic approach to their offering,” Lang added, particularly if Walmart measures in-store uplift against supplier television buys.


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