Walmart sees flywheel effect | WARC | The Feed

Walmart sees flywheel effect

Walmart has grown its Connect advertising business to $2.1 billion and reports that this is being driven by its changed business model. 

Context 

President and CEO Doug McMillon explained in a Q4 earnings call that overall company growth is being fuelled by the new business model and updated flywheel that it set out early last year. “Our strategy is coming to life,” he said. 

For now, however, Walmart’s advertising business, Walmart Connect, remains a relatively small player, sandwiched between Spotify and Pinterest in the global ranking and a long way behind Amazon, its most immediate rival in retail media.

Details 

• During 2021, the number of active advertisers using Walmart Connect grew more than 130% year-over-year. 
• Around half of ad sales came from automated channels in Q4, more than double the previous year. 
• Data from Perpetua show a 76% increase in ad investment on Walmart in November during the holiday season.
• During November, impressions surged ahead 160% month-on-month as targeting became broader, but CTR decreased 34% due to lower relevancy.

Key quote

“We’ve got a business that's becoming increasingly digital, the e-commerce business – first party, third party – is growing. It gives us the opportunity to grow advertising income. It’s grown at a fast rate, and it’s growing across markets” – Doug McMillon, president and CEO, Walmart.

Sourced from Motley Fool, Perpetua