Walmart says its US ad business grew 30% in the past year from Q2; eMarketer says Walmart will claim 6.8% of 2024 US retail media spending, for $3.7B in revenue
Gregory Meyer / Financial Times :
Context & Ripple Effects
Walmart’s advertising momentum builds on years of digital-commerce expansion: its online grocery push helped drive 43% US e-commerce growth in Q4 2019, followed by 79% US e-commerce growth in Q3 2020. That growth created a larger commerce audience for an ad business to monetize.
The new estimate places Walmart among the sizable retail-media sellers rather than treating advertising as a peripheral retail initiative. It also follows evidence that Amazon had already expanded its share of the US digital ad market, making retail-owned audiences a more consequential advertising channel.
First-order effects
- Walmart’s 30% growth and projected $3.7B in 2024 revenue reinforce advertising as a meaningful revenue stream alongside its retail operations.
- Advertisers gain a larger Walmart-based route to reach shoppers, while Walmart can further package its shopping audience for media buyers.
Second-order effects
- Competing retail-media networks face greater pressure to show that their shopper audiences and measurement can attract budgets as Walmart’s projected share rises.
- Amazon’s earlier expansion in US digital advertising provides the competitive benchmark: Walmart’s growth sharpens the contest for retail-linked ad spend rather than leaving Amazon as the only scaled retail-media option.
Third-order effects
- If this growth persists, large retailers’ digital commerce operations will increasingly be valued not only for merchandise sales but also for their ability to generate advertising inventory and shopper data.
- The outcome will depend on whether advertisers see retail-media performance as incremental and measurable; sustained budget shifts would further blur the boundary between retail platforms and ad platforms.
The trend: Retailers are turning their digital shopping audiences into scaled advertising businesses, intensifying competition for performance-marketing budgets.