Walmart leverages offline data in its latest bid to take on Amazon

Walmart fired a shot across the bow of its biggest rival, Amazon, while also taking a page straight out of its playbook on Friday.

The company’s ad tech arm, Walmart Media Group, introduced Advertising Partners, a new unit that includes third-party vendors Flywheel Digital, Kenshoo, Pacvue and Teikametrics. The move will potentially allow advertisers to tap into Walmart’s trove of consumer data to offer advertisers better targeting and measurement tools.

“Brands can tap into Walmart’s shopper footprint to get the right sponsored ad experience, to the right shopper at the right moment,” Lex Josephs, VP of sales and partnerships at Walmart Media Group, said in a blog post on the company’s website. “We have something unique to offer brands, the ability to maximize campaigns with rich data insights—based on both in-store and online data—at scale.”

Powerhouse brands such as P&G and Kimberely Clark already advertise on channels such as Amazon. Walmart’s offerings, however, from the way they executed planning, forecasting and buying through Walmart’s channels, weren’t as robust. The addition of Flywheel Digital, Kenshoo, Pacvue and Teikametrics has the potential to level the playing field so Walmart can better compete for ad dollars previously earmarked for Amazon. 

The vendors Walmart selected also happen represent large advertisers who already use their tools to buy ads on platforms such as Amazon and Google Shopping. Unlike Amazon, however, Walmart’s key differentiator is its massive data on offline sales, as the company can now attribute digital ads to products purchased in store by consumers, says Nick Weinheimer, general manager for e-commerce at Kenshoo. 

“The total size of Walmart’s offline footprint dwarfs Amazon’s,” Weinheimer says. “You’re going to see Walmart telling the story of how their digital ads influence offline purchasing behavior.” 

That will surely grab the attention of packaged goods advertisers, as their digital marketing challenge is often the inability to tinker with their digital ad spend based on tying it back to actual sale. Until now, most of their Walmart sales are done through third-party retailers who are unable to provide any sort of attribution, says Lance Porigow, CMO at digital agency The Shipyard, says. 

“If Walmart’s advertising platform can help close the gap between digital advertising and conversion for the biggest retailer in the country it would be a big step forward for the industry,” Porigow says. “Of course, that’s if Walmart is willing to share that data.” 

Drawbacks

Although Walmart is best known for selling products ranging from bananas to high-definition TVs, the retail juggernaut also commands massive traffic to its website, making it one of the country’s largest publishers. The Arkansas-based company is the second most visited retail website in the U.S., seeing nearly 128 million monthly unique visitors, just behind No. 1 ranked Amazon (198 million), according to Comscore. 

Walmart is now claiming that it can improve ad targeting while also helping advertisers measure effectiveness across the so-called consumer journey, John Koetsier, VP of insights at Singular, says. 

“Walmart is doing this because they’ve built a giant business and a huge amount of retail customer data,” Koetsier says. “And they’re just starting to realize how valuable access to the insights from that data—and access to their customers—really is.” 

Advertisers typically pay third-party vendors such as the ones Walmart is working with a percentage of their ad spend, which often ranges from 10 percent to 30 percent, for access to their targeting and measurement tools, says Koetsier. 

“At Amazon you have to cut through all the noise from Amazon’s own branded merchandise and its house brands, driving the need for brands to buy ads to get reasonable placement for their own products,” Koetsier says. “Walmart may also take advantage of similar mechanics and essentially, like Amazon, make money not just from selling products, but from selling access to its customer base.”