Walmart Wants A Big Advertising Business Just Like Amazon’s

Walmart Wants A Big Advertising Business Just Like Amazon’s

Walmart wants to start collecting customer data just like Amazon in order to appeal to big advertisers

Walmart has 4,755 stores, 1.5 million employees and $380 billion in revenue in the US alone, and about 300 million shoppers in their stores each month and even more on its websites. Basically, it draws in more people than Google, Facebook, or Amazon, however, it hasn’t done enough to turn that data into profit. That audience and the purchase data they generate, can be great for big advertisers like Coca-Cola Co. and Kraft Heinz Co. Chief Executive Officer Doug McMillon said to investors back in October: “We have a tiny ad business. It could be bigger.”

However, Walmart, along with Target, Kroger, and other retailers want to pitch ad sales that actually appeal to their customers. That is why Walmart has hired executives from NBC and CBS to help with its advertising business. “They have a nice story to tell advertisers. What we see now is a more sophisticated approach to ad sales than retailers have had in the past,” said David Tiltman, head of content at WARC – an advertising analysis firm.

Walmart has previously spent billions in building out services like home delivery, or improving their websites, but these investments did not bring the expected profit. Moreover, looming Chinese tariffs could further cramp their earnings. Retailers feel they should also deep into the ad pool like Amazon did, plus, statistics say last year’s ad sales hit a whopping $208 billion, out of which 50% was online.

For retailers, advertising is just another a battle with Amazon, in which they need to find ways to make money besides just selling products. However, things might be looking good for retailers, according to Bryan Gildenberg, chief knowledge officer at Kantar Consulting: “Many consumer product companies are looking at their marketing spending and thinking the retailers’ ecosystem might be a better place to spend it.”

Source: bloomberg.coms