Walmart’s advertising ambitions are growing.
So it bought a TV manufacturer.
On Tuesday, Walmart announced its acquisition of the smart TV maker Vizio for a grand total of $2.3 billion.
Why? To boost its ads business with streaming inventory, viewership data and, of course, shoppable TV ads.
This deal brings an end to Walmart’s neutrality when it comes to TV sales. Walmart can, and likely will, lower the price of Vizio TVs to increase sales, thereby undercutting competitors carried in stores, such as Samsung, LG and Roku.
But, perhaps most importantly, Walmart gets control over Vizio’s operating system and its hub of first-party viewing data. With that, the retail giant can link its own customer purchase data to serve targeted ads for Walmart products directly into the homes of Vizio device owners.
Together, data and inventory are the “lifeblood of retail media networks,” Gil Sadeh, chief growth officer at the marketing platform Skai, tells AdExchanger. The Vizio deal puts Walmart in a better position to compete against Amazon – which also straddles CTV and retail media, and owns the Fire TV operating system – by “offering advertisers a compelling alternative for reaching high-value audiences.”
A dance with data
Walmart is not the first media company to realize the benefits of running both a hardware and an ad sales business.
Vizio, for one, already attributes most of its recent growth to ad sales – underpinned by its automatic content recognition data, which identifies what viewers are actually watching. Streaming TV operators and app companies don’t expose their own viewership data (Netflix is one example), so picking it up straight from the smart TV is one of the few reliable methods of collecting streaming viewership info. Today, many alternative TV measurement providers license ACR data from Vizio’s data science subsidiary, Inscape.
Walmart’s deal for Vizio may be challenged by regulators for anticompetitive reasons, not unlike Amazon’s aspirational acquisition of smart vacuum manufacturer iRobot, which it called off last month. But with the TV sets and the ACR data generated by the TV, Walmart can “directly integrate Vizio supply with its [own] data and buying tools” – namely, the Walmart DSP built on The Trade Desk – which should help raise audience match rates and, in turn, return on ad spend, said Nikhil Raj, chief business officer at Moloco. (Raj co-founded Walmart Exchange, which has since been folded into Walmart Connect.)
Vizio also highlighted higher ROAS as an anticipated result of the acquisition in a LinkedIn post on Tuesday.
Vizio already has direct relationships with hundreds of advertisers, and the opportunity to boost ROAS with more personalized ads under Walmart’s ownership will be a huge draw, particularly for those in the consumer-packaged goods and grocery vertical, according to Alex Yip, director of CTV product at AppsFlyer.
Add to cart?
Vizio’s data is clearly a major value for Walmart’s ad biz.
But there are hypothetical avenues for growth in the future, too. One of them is shoppable ad units.
Walmart has been dabbling in shoppable ads for years, including via a partnership with Roku in 2022. Walmart even produced a shoppable miniseries that ran on Roku, TikTok and YouTube during the holidays in December.
Now, it’s likely Walmart will apply the same strategy on Vizio TVs. As a retailer first and foremost, Walmart wants to sell advertisers on the ability to link TV commercials with real-world purchases (or “closed-loop attribution,” in advertiser-ese).
Walmart technically has two RMNs – Walmart and Sam’s Club – and tying both to proprietary CTV supply could be a catalyst to Walmart’s ad revenue, which already doubled from 2021 to 2023, Yip said.
This deal “enables a profitable advertising business [at] the intersection of retail and entertainment,” said Seth Dallaire, EVP and chief revenue officer of Walmart’s US business, in a statement.
Specifically, Walmart could run more shoppable TV ads within streaming partner apps. A Paramount+ with Ads subscription is included gratis with a Walmart+ membership, so creating more shoppable units for Paramount+ is one possibility.
Yip said owning Vizio would “further establish Walmart’s dominance” in shoppable TV (which, to be fair, has not quite taken off yet). But Walmart is “head-to-head” with the likes of Amazon and Roku to realize the ambition.
Stream it to believe it
Vizio could also unlock more streaming media partnerships, since Walmart hasn’t shown much interest in becoming a true studio production company (unlike Amazon or Apple).
Other entertainment companies could cut deals to be carried within the Walmart+ membership, similar to Paramount+. Streaming TV apps and studios could also cut deals with Walmart to tap into data from Vizio owners – Walmart would get more inventory, while streamers get competitive CPMs and access to Walmart’s demand, including practically every well-known grocery brand.
Some ad industry execs go so far as to predict that Walmart itself might launch its own streaming platform.
“It wouldn’t be a surprise to see the company enter the [streaming] space with this buy,” Yip said. “With several streaming services grappling with sluggish growth and high churn, Walmart could scoop up a few and bundle them into Walmart+.”
For Walmart, the stream dream is no longer a pipe dream.
Walmart and Vizio did not provide a comment in time for publication.
