Walmart is developing a self-service ad platform and API in a move straight out of Amazon’s playbook.
The retailer confirmed the news, but declined to share additional details. However, agencies familiar with the beta program said they expect the platform to roll out in 2020.
As a result, Walmart will no longer work with digital retail media company Triad Media. It’s also bad news for advertising platform Criteo, which profited from selling Walmart inventory. But, agencies say, it should be good for the industry as a whole as it gives them—and their brand clients—more control over ad spend and helps Walmart better compete with Amazon and monetize its properties.
The self-service platform will offer product ads called Walmart Performance ads via keyword targeting. Performance marketing agency iProspect has access to the tool through CPG clients in an early beta program, according to Mike DiBari, iProspect’s manager of marketplace and retailer optimization.
Sponsored products appear individually within search results, as well as in carousels, banner ads on product pages. Digital marketing agency Tinuiti, which is also working with clients on the platform, said Walmart allows for two sponsored products per search engine results page (SERP) and has a $1,000 minimum lifetime campaign spend—and a $100 daily spend.
Elizabeth Marsten, senior director of strategic marketplace services at Tinuiti, said the agency is seeing value based on client executions so far, but it takes four to six weeks to get enough information to develop how a given brand should approach Walmart advertising, followed by another two to three weeks to ramp up said strategy. And, in order to be eligible, products must rank organically within the top three pages of search results, and the product must also be winning the buy box, she added.
In addition, Walmart will offer an API connection similar to Amazon’s, which will allow users to “dig deeply into campaign performance, set up automated actions such as campaign scheduling, and bid-rule-based optimization or identify out-of-stock products,” DiBari said.
But, potentially most exciting of all, DiBari said the tool can house data from both Amazon and Walmart under the same hood. That allows for “data across multiple retailers to be included in a single tool and carving a path for cross-retailer insights and management.”
There are a few other distinctions.
For starters, Walmart has less traffic than Amazon and its targeting capability—keyword only—is “super limited,” said David Williams, director of Amazon at digital marketing agency Wpromote. Amazon, on the other hand, also offers product targeting—including specific products or categories with adjustments for price, brand and star rating, as well as shipping eligibility, book genres and age range—and automatic targeting based on keywords and products.
Nevertheless, David Dweck, head of paid search at Wpromote, said Walmart’s physical footprint makes it “a bit more attractive for big brand [and] CPG retailers who struggle to get physical shelf space by enabling them to get digital shelf space.”
Melissa Burdick, president of ecommerce platform Pacvue, said the biggest distinction is in bidding: Walmart has a first-price bid auction, while Amazon has a second-price bid auction. That means brands could pay a lot more on Walmart.
“If you bid $5 on ‘laundry detergent’ [on Amazon] and I bid $10, I would win at [$5.01],” she said. “On Walmart, I’d pay $10.”
Burdick said this will probably change in time, but for now, brands with a high-bid strategy would be wise not to transfer it directly to Walmart.
In addition, while organic results on Amazon are likely impacted by ads, Walmart says outright that sponsored products improve organic ranking in its Advertising FAQs.
“Amazon also rewards brands with better organic rank for running ads,” Williams said. “They don’t state it as explicitly as Walmart does, but it’s a factor in their A9 algorithm.”
Otherwise, Burdick described Walmart’s self-service tools as resembling “Amazon when Amazon first started.”
Dweck called it a huge step for Walmart as the retailer looks to “mimic the business Amazon has grown with Amazon search,” which is estimated to be worth between $5 billion and $6 billion.
“The net of it is brands/agencies have a self-service UI/platform where they can bid on keywords on Walmart,” Burdick said. “The benefit is control is in their hands—data, impressions, spend, the keywords they are targeting. Before, you had to go through Walmart Media Group to buy, and you just didn’t have as much transparency and visibility. Now, just like Amazon Marketing, you have visibility and you have more control.”
One drawback is it’s another thing to learn, but Burdick said that’s why agencies should be early adopters.