1. Channel: Mass

Walmart Upgrades Its Digital Ad Network

From Advertising Age:

“Walmart Connect, which has made huge gains in recent years through digital advertising, is testing ways to bolster in-store pieces of its retail media network.

“For the first time, Walmart Connect is selling ads on its revamped in-store radio network and integrating sampling programs with online offerings. While aspects of Walmart Connect’s expanded in-store footprint have been tried and marketed to advertisers before, it’s an upgrade from what the retail behemoth has done historically.”

According to the story, “Seth Dallaire, Walmart’s chief revenue officer, is seeing interest in ‘ways that we allow brands to speak to consumers while they’re shopping, though they’re not as developed yet,’ he said during an analyst question-and-answer session last week.

“Some growth, he said, has come from brands looking to defend against consumers switching to private-label alternatives amid rising prices. He said Walmart Connect also has expanded its advertiser base of late as it switched to a second-price auction format from a first-price auction. ‘Essentially things reset at a lower price,’ he said.”

Ad Age writes that “Walmart Connect has been growing fast as of late, largely on the strength of its digital offerings, becoming a $2.7 billion global business last year and growing by more than 30% last quarter. Walmart is on track to become a top 20 global media company this year with around $3.5 billion in revenue, said Brian Wieser of the Madison and Wall consultancy.”

KC’s View:

As Walmart creates these new revenue streams, it is going to have access to cash that will allow it to lower prices and tighten margins – all of which makes it more difficult to compete with them.

No wonder Kroger and Albertsons want to merge.  Expect them to make that point to the Federal Trade Commission (FTC).

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