Walmart’s Advertising Business Sees Rapid Growth, Expected to Continue
Walmart’s advertising business is experiencing rapid growth, positioning the company as one of the fastest-growing in the industry. According to Deutsche Bank, the retail giant’s price target has been raised to $77 from $71, citing the company’s growing revenue and earnings.
Walmart’s Advertising Strengths
Walmart’s advertising business is performing well in five key areas: Walmart Connect, its Retail Media Network membership fees, marketplace transactions, compliance services, and data monetization. These categories are growing rapidly with high margins, driving the company’s underlying business transformation.
Advertising Business Details
Walmart’s advertising business is a $3.4 billion (approximately €3.136 million) business that grows between 20% and 25% annually, with a contribution of around 70%. The company’s ability to attribute an ad to a specific customer in both digital and physical experiences sets it apart from other digital advertisers.
Recent Acquisition of Vizio
Walmart’s recent acquisition of Vizio creates new opportunities for advertisers and is expected to contribute to the company’s gross merchandise volume growth by 8 to 10%. The acquisition allows Walmart to connect with customers in new ways, including innovative TV and home media and entertainment experiences.
CEO’s Insights
Walmart CEO Doug McMillon highlighted the company’s differentiating advantage: "If brands advertise with a digital ad, for example, and a customer makes a transaction a week later in a store, we can connect that for them and let them know that the ad actually worked."
Retail Media Landscape
Walmart has emerged as a key player in the Retail Media landscape, with its foray into advertising contributing to the company’s growth in recent quarters. The company is expected to continue on this path of growth.
Other Business Highlights
Walmart Fulfillment Services is also growing, and the company is gaining traction in private-label products, which now account for 20% of Walmart’s sales and 30% of Sam’s Club’s sales.
