Walmart continues its strong commitment to retail media by the hand of WalmartConnect. The company’s ad technology platform has made great strides in the fourth quarter of fiscal 2022. According to a new report of pacvue, ad spend across Walmart’s various sponsored ad formats has grown 31% year-over-year. The report reveals that in the fourth quarter, brands have increased their spending on WalmartConnect 16.07%.
With respect to return on ad spend, this too has seen an 83% year-over-year rise to $6.06 from $3.32. The data shows that sponsored ads will significantly increase by 17.95% quarter over quarter and 31.49% year after year. The click rates they doubled with an increase of 0.62% in the 4Q of last year, compared to 2021 (0.30%). On the contrary, the cost per click (CPC) it fell 25% compared to the year 2021.
Walmart continues its effort to advance in Retail Media and there is no doubt that it will gain share in the coming years. Last year, the company established a second-price auction model for its ads, a move that helped lower its average CPC and improve its return on ad spend. It has also reached agreements with several ad technology providers that specialize in areas such as e-commerce ads, ad optimization, and multi-channel advertising. The efforts have helped Walmart increase its ad revenue nearly 40% by 2022, according to Insider Intelligence.
Also last year Walmart had $2.22 billion in digital ad revenue in the US. thus becoming the only business of retail media beyond Amazon which has raised more than 1,000 million dollars and ranking second among all Retail Media networks with a share of 5.9% of advertising spending this 2022.
Walmart’s net advertising revenue will triple between 2021 and 2024
The data reflects that the company is well positioned to capture a larger share of US digital ad spending given the deprecation of cookies and third-party identifiers, in addition to increasing privacy legislation and regulatory restrictions, and there is no doubt about what Walmart will gain participation in Retail Media in the next years. According to Insider IntelligenceWalmart’s net advertising revenue in the US is expected to nearly triple between 2021 and 2024 to $4.52 billion, representing an 8.2% share of retail media spending in the US. Walmart will position itself as one of the most important ‘players’ in the Retail Media ecosystem by 2024.
The retail media reached an investment of 101,000 million dollars globally in 2022, 15% more than the 88,000 million dollars registered in 2021, according to GroupM. This volume of investment represents 18% of the total budget allocated to digital advertising and 11% of total advertising investment globally. Or the equivalent of 1.8% of global ecommerce Gross Merchandise Volume (GMV). In the next five years, they estimate that the advertising investment in Retail Media will exceed 160,000 million dollarswhich represents a growth rate of 60%.