How Walmart Connect Is Challenging Amazon Ads

How Walmart Connect Is Challenging Amazon Ads

by Tim Colucci Walmart

The rise of retail media networks continues to dominate the advertising landscape. There are hundreds of them now, offering advertising services built on all the data they collect from their customer online and in-store. Approximately 75 percent of the net retail ad spend in the U.S. is commanded by Amazon Ads. But there are many other impressive retail media networks that are ascending in this highly fragmented industry. Walmart Connect is one of them. Walmart Connect enjoys an advantage over Amazon Ads in one significant way: Walmart Connect can capitalize on data collected from customers shopping both online and in-store.

Within the U.S., nearly 139 million consumers frequent Walmart’s brick-and-mortar stores, website, or mobile application on a weekly basis. As a result, Walmart has nearly doubled the scope Walmart Connect, according to statements made by executives during a call about the retailer’s Q2 results for fiscal 2024. Walmart Connect experienced a 36 percent increase in ad sales year over year in Q2, mirroring the growth in Walmart’s global ad business, including Flipkart in India. Advertising for Walmart’s Sam’s Club brand saw a 33 percent year over year rise.

The growth is credited to a strong demand for sponsored product advertisements, a core aspect of the retail media sphere where Walmart Connect is a competitor. Leadership also recognized the growing appeal of in-store marketing methods. Earlier this year, Walmart said that customers at Walmart stores will soon encounter an increased number of third-party advertisements, including visual ads at self-checkout areas and TV sections, audio advertisements over the store’s radio system, and product samples at designated demo stations.

This move into advertising by Walmart mirrors similar strategies undertaken by other retailers such as Kroger, which recently entered an agreement to install digital smart screens in the refrigerated sections of numerous stores. Similarly, Target has started experimenting with in-store demonstrations and giveaways, like a co-branded “Barbie” event with Mattel, which was held in around 200 stores.

Walmart’s strategy of selling advertising space provides an additional revenue stream, leveraging the company’s vast influence and paving the way to higher-profit ventures. As a major discount retailer, Walmart operates close to 4,700 stores across the United States, with approximately 90 percent of the country’s population residing within a 10-mile radius of a Walmart location.

Executives at Walmart reported that, on average, advertisers see a 30 percent boost in the return on digital ad spending. In May, Walmart brought on a team of third-party partners to enhance marketing creativity and connect with consumers.

Walmart Connect’s ongoing success is indicative of the continued growth in retail media, notwithstanding some advertisers’ dissatisfaction with the fragmented nature of the industry and uncertainty in the broader digital advertising market. As a point of reference, Amazon Ads posted a 22 percent year over increase in ad sales in Q2, amounting to $10.7 billion. Amazon recently announced that it will expand its Sponsored Products ad unit to sites beyond Amazon, including Pinterest and BuzzFeed.

We suggest that advertisers:

  • Consider retailer-based ad networks as a complement to your existing digital ad strategy, not as a replacement.
  • Monitor the effectiveness of your advertising on Meta and Google amid the demise of third-party cookies. Retail media networks offer the advantage of tapping into first-party data that is unaffected by the erosion of third-party cookies.
  • Work with an agency partner that knows the terrain. For instance, at True Interactive, we complement our history of helping businesses advertising on Google and social media with expertise across retailer ad networks such as Amazon and Walmart.

To succeed with online advertising, contact True Interactive. Read about some of our client work here and our Walmart Connect expertise here.

YouTube Rebounds with Connected TV Ad Spend

YouTube Rebounds with Connected TV Ad Spend

by Tim Colucci YouTube

The conversation about connected TV (CTV) advertising often focuses on the major streaming platforms such as Hulu and Netflix. But YouTube belongs in that conversation, too. YouTube has seen a remarkable surge in CTV ad spend for the most recent quarter, surpassing its competitors. As reported in Insider Intelligence, while YouTube experienced a 31 percent increase in CTV spending, streaming services like Max and Netflix only saw a growth of 6 percent.

In addition, the quarter marked the first time since Q4 2021 that platforms such as YouTube, Google Search, Amazon, Instagram, and Facebook all witnessed spending increases.

The CTV sector has seen a boom due to a rise in cord-cutting and increased time spent on these platforms. Consequently, it has become one of the strongest areas for ad spending in 2023. Presently, CTV spending in the United States amounts to $25.09 billion, while traditional TV spending remains higher at $61.31 billion. But by 2027, this gap is expected to close, with CTV spending projected to reach $40.90 billion and TV spending forecasted at $56.83 billion.

The transition to CTV may gain momentum soon, as industry giants like Disney contemplate selling off some TV assets to focus more on digital video. Such moves from major advertisers could attract more investment into the digital video space.

YouTube stands as a frontrunner in the digital pivot, owing to its TV viewership and content model, which gives it an edge over streaming services and other CTV platforms entering the market. The platform has seen a steady increase in viewership on TV screens, with users spending 15 minutes on CTVs, matching the time spent on mobile viewing. YouTube has capitalized on this growth by incorporating user-friendly features and introducing Shorts to TV screens.

In addition, the ongoing Hollywood writers and actors strikes position YouTube to attract more ad revenue. Competitors will have limited new content to entice advertisers, whereas YouTube’s user-generated content model remains unaffected, even weakening arguments against treating such content as “premium.”

According to forecasts, YouTube is expected to secure $2.89 billion in U.S. CTV ad spending this year, second only to Hulu, which Disney is actively seeking full ownership of.

The rise of CTV ad spend is a welcome development for YouTube, owned by Google (which, in turned, is owned by Alphabet). YouTube’s ad business had posted losses for three consecutive quarters (an unprecedented downturn following years of double-digit gains) before experiencing a rebound in the most recent quarter.

In a call with investors, Alphabet CEO Sundar Pichai said, “The Living Room remained our fastest growing screen in 2022 in terms of watchtime. We’re reaching more than 150 million people on Connected TV screens in the US, and seeing growth and momentum internationally. And on subscriptions, there’s good growth. Late last year, we announced over 80 million YouTube Music and Premium subscribers.  Signups for NFL Sunday Ticket kicked off in April, and we look forward to hosting our first football season on YouTube this fall.”

Advertisers should watch closely emerging ad formats that YouTube is rolling out specifically for CTV. For instance, non-skippable ads are coming soon to YouTube Select on connected TV. This means that viewers will see one 30-second ad instead of two consecutive 15-second ads. YouTube is also bringing new Pause experiences to CTV, so that advertisers can drive awareness or action by owning that unique interactive moment when people pause a video. Learn more about these developments on YouTube’s blog.

At True Interactive, we partner with our clients to manage CTV campaigns that deliver ROI. We work with all the major platforms, including YouTube. Learn more about our CTV work on our website and contact us to discuss how we can help you.

Why Barbie Is a Connected TV Star

Why Barbie Is a Connected TV Star

by Tim Colucci Connected TV

I’ve written a few times about Roku’s marketing innovations in 2023, and for good reason: with more than 70 million active accounts, Roku is the leading streaming platform in the United States, and it is a bellwether for the rise of connected TV (CTV). Roku’s ability to create branded content illustrates the marketing possibilities of CTV, an area where True Interactive has deep experience.

The latest sign of Roku’s leadership: the company has successfully acquired the rights to the highly anticipated Barbie movie. The deal, which has generated considerable industry buzz, underscores Roku’s commitment to expanding its original content offerings and capitalizing on the growing popularity of streaming services.

The Barbie movie, a joint production between Mattel Films and Warner Bros., is expected to be a major draw for viewers of all ages. As part of the agreement, Roku has secured exclusive streaming rights for the film, which will be available only to Roku’s extensive user base. This maneuver is set to not only attract new subscribers but also solidify the loyalty of existing Roku users.

The Barbie movie is taking over Roku devices, including a Barbie Dreamhouse in Roku City; a takeover of the Roku home screen (where users access the apps to watch their shows and movies); and the ability to watch a trailer for the movie or buy a movie ticket directly on their TV sets.

Barbie, which stars Margot Robbie and Ryan Gosling, is present on the Roku home screen. When users pause what they’re watching up through July 23, the Barbie Dreamhouse and Barbieland take over the Roku City screensaver, as do Barbie-themed billboards and movie theaters. When users click through, they are brought to a landing page to watch a trailer for the movie, and with a QR code that will let them instantly buy tickets.

Roku’s move towards producing original content represents a shift in its business strategy. Traditionally known for providing a wide array of streaming options from various content providers, the company is now positioning itself as a creator of exclusive, premium content, setting it apart from its competitors, which include Apple TV, Amazon Fire TV, and others.

Industry analysts speculate that this acquisition is just the beginning of Roku’s plans for expansion. With the rise of streaming services and cord-cutting becoming the norm, Roku is keen on establishing a strong position in the market by producing engaging original content.

As streaming wars continue to intensify, Roku’s focus on content creation may set the standard for the entire CTV industry. By leveraging its massive user base and constantly growing digital ecosystem, the company is poised to make a significant impact in the entertainment industry.

At True Interactive, we believe it’s important that businesses understand the growth of advertising on streaming platforms in context of the rise of connected TV. If you’ve not done so already, take a closer look at why connected TV is growing and how it could expand your audience. (True Interactive can help you with that.) Connected TV is enjoying 60-percent growth, driven by a public’s appetite for streaming that continues unabated.

Contact True Interactive

True Interactive can help you navigate the connected TV landscape. Our services range from media strategy and planning to automated performance reporting. Learn more about our services here, and contact us to learn more.

Why Roku’s Relationship with Shopify Matters to Advertisers

Why Roku’s Relationship with Shopify Matters to Advertisers

by Tim Colucci Connected TV

Roku has announced a partnership with Shopify that provides viewers the ability to purchase products from Shopify merchants directly from their TV through Roku Action Ads. This announcement is significant because it demonstrates the potential convergence of connected TV (CTV) with e-commerce.

When viewers see an ad for a Shopify merchant, they can simply press OK on their Roku remote to learn more about the product and purchase it. Viewers can use Roku Pay to complete their purchase. Once the transaction is processed, purchasers will receive an email confirmation from the merchant.

This integration is the first commerce integration for independent Shopify merchants on TV streaming. It creates a new advertising channel for Shopify merchants to reach a wider audience. Men’s apparel brand True Classic, the game-based connected rower Ergatta, and wellness brand Olly have signed on as initial partners.

With this new integration, viewers can now purchase products directly from their TVs after seeing an ad for a Shopify merchant. Here is how the experience looks, courtesy of Roku:

Although the partnership is just coming out of the gate, it offers some potential benefits, including:

  • Shortened advertising funnel: viewers can now purchase products directly from their TVs after seeing an ad, which shortens the advertising funnel and gives Shopify advertisers more data about their customers.
  • More customer data: Shopify advertisers can now collect more customer data, such as purchase history and shipping information, which can help them better understand their customers and target their advertising more effectively.
  • Point-of-sale access: Shopify merchants can now reach a wider audience by advertising their products on Roku devices. This gives them point-of-sale access to Roku’s audience, which can help them increase sales.

This new partnership is a win-win for both Roku and Shopify, and it’s a sign of the growing importance of commerce on TV streaming devices.

Roku and Shopify have been partners in commerce for years. In 2021, Roku launched a marketing app for Shopify merchants, allowing them to build, purchase, and measure TV streaming ad campaigns. This was the first TV streaming app available in the Shopify App Store.

Also worth noting: two months ago, Roku revealed new ad products at the 2023 IAB NewFronts presentation. These products include AI capability searches that match a brand’s message and place their ads in real time, as well as an interactive Roku screensaver where businesses can advertise.

Roku is a major player in the fast-growing connected TV industry. For the first time, streaming viewership topped cable in 2022, and this trend is not going to reverse course as cord cutting continues. As reported in Axios recently, traditional television companies and major media firms are bracing for further declines in the ad market and yet another increase in cord-cutting this year. At True Interactive, we believe it’s important that businesses understand the growth of advertising on streaming platforms in context of the rise of connected TV. If you’ve not done so already, take a closer look at why connected TV is growing and how it could expand your audience. (True Interactive can help you with that.) Connected TV is enjoying 60-percent growth, driven by a public’s appetite for streaming that continues unabated.

Contact True Interactive

True Interactive can help you navigate the connected TV landscape. Our services range from media strategy and planning to automated performance reporting. Learn more about our services here, and contact us to learn more.

Apple Increases the Stakes in the Consumer Privacy Wars

Apple Increases the Stakes in the Consumer Privacy Wars

by Tim Colucci Apple

Apple’s 2023 Worldwide Developers Conference generated a lot of news coverage because Apple unveiled its long-anticipated mixed reality headset, VisionPro. But the device won’t hit the market until 2024, and only early adopters with $3,500 to spare will use it (initially). Meanwhile, Apple announced something more impactful to the advertising world: a new privacy control.

Coming Soon: iOS 17

Apple’s iOS 17, the company’s newest operating system, will add greater protection for private browsing, both from trackers as a user browses, and from people who might have access to a user’s device. Advanced tracking and fingerprinting protections go even further to help prevent websites from tracking or identifying a user’s device. Private browsing will lock when not in use, allowing a user to keep tabs open even when stepping away from the device.

Apple will also add link tracking protection in Messages, mail, and Safari browsing. The default setting is private browsing, but the feature can apply to all browsing if it’s turned on under a user’s device settings.

Link tracking protection could have some major impacts. Some websites add extra information to their URLs in order to track users across other websites. Now this information will be removed from the links users share in Messages and mail. This information will also be removed from links in Safari private browsing.

Digging Deeper

Advertisers and analytics firms employ a method of tracking user activity across websites by adding tracking parameters to links. Instead of relying on third-party cookies, they append a tracking identifier to the end of the page URL. This approach evades Safari’s intelligent tracking prevention features that block cross-site cookies and other forms of session storage.

When a user visits such a URL, the analytics or advertising service at the destination can access the URL and extract the unique parameters. These parameters are then associated with the service’s backend user profile, enabling the delivery of personalized ads.

To address this practice, Apple is taking measures to curtail it across its operating systems this year. Safari will automatically identify the identifying components of the URL and remove only those parts, leaving the remaining URL intact so that users can still reach their intended web page.

This process occurs during browser navigation in Safari’s private browsing mode, as well as when clicking on links in the Mail and Messages apps.

As a partial solution, Apple has introduced an alternative method for advertisers to measure the success of their campaigns. Private Click Measurement, available in Safari’s private browsing mode, allows advertisers to track conversion metrics without disclosing individual user activity.

Implications of iOS 17

What are the implications? Well, iOS 17 won’t hit until likely September 2023, so no one knows for sure yet. But based on what we know, the new feature could disrupt the audience creation process on platforms such as Meta, Google, and Microsoft due to the parameters being stripped, but aggregated metric data will likely be OK. Apple will not be able to kill those nor the little redirects as they’re necessary for the marketplace and part of the auditing process.

But iOS could disrupt email marketing. In email marketing, links to websites often contain personalized identifiers that track user activity. Apple is taking steps to eliminate this personalized information from links clicked within the Apple mail client. This change may have implications not only for attribution but also for other integrations that rely on such information, such as how websites apply promotions. If you are currently building audiences or affinity models based on user click-through from emails, it is expected that these audiences will see a significant decrease as users adopt this feature.

In terms of marketing, it is important to anticipate how reporting will function in the future. As I noted, with regards to attribution, Apple has been advocating for the use of Private Click Measurement. This tool allows advertisers to track ad campaign conversion metrics without revealing individual user activity, striking a balance between advertising needs and user privacy. As attribution becomes increasingly challenging due to technical policies and regulations, it may be the right moment to embrace attribution methods that prioritize user privacy.

The complete impact of this update remains uncertain for numerous companies, posing challenges for those currently relying on query parameters for on-site personalization or deep linking. While there are potential workarounds, they are not without difficulties, and the overall user experience may be less than satisfactory for some individuals.

Contact True Interactive

At True Interactive, we’re following all latest updates to consumer privacy and adapting our own tools accordingly. We have our clients covered. Contact us to learn how we can help you.

How Roku Plans to Generate More Ad Revenue

How Roku Plans to Generate More Ad Revenue

by Tim Colucci Advertising

Roku screensavers are becoming fertile ground for advertising.

Roku makes streaming devices that allow users to watch TV shows, movies, and other content from the internet on their TVs. Roku also offers a variety of content, including channels from Netflix, Hulu, Amazon Prime Video, and many more. As of 2023, Roku has over 60 million active accounts. Its competitors include Amazon Fire TV and Apple TV.

When people watch content via their Roku devices, they invariably see a screensaver, which appears when a user has been inactive on their device (this is true for users of other streaming TV devices). Roku has been using that digital real estate to generate advertising revenue.

Roku’s screensaver consists of “Roku City,” a playful urban landscape first introduced in 2017. Roku is experimenting with different ways to turn Roku City into a playground for brands. For instance, at the 2023 SxSW festival, Roku created a real-life Roku City via an interactive, multi-level attraction with Best Buy. The pop-up Roku City featured a Best Buy Home Theater Experience, a rooftop diner destination, a style shop, and hidden Hollywood references throughout the Roku cityscape.

Now, Roku is turning the screensaver into a place to buy ad inventory. At the annual IAB NewFronts, Roku unveiled a number of advertising initiatives, including plans to give ad space on billboards within the screensaver, which Roku says reaches 40 million homes. McDonald’s this summer will be the first brand to appear within the Roku City skyline. The fast food giant will have an animated restaurant with its Golden Arches inserted straight into the screensaver.

And that’s not all. Roku is also relying on AI to incorporate brand messages into an “iconic plot moment” in its content library. Head of Roku U.S. Brand Sales Julian Mintz explained that AI will search for “iconic plot moments” within shows and match them up with a brand’s message. For example, an apparel ad could appear when Tim Gunn makes a critique during “Project Runway.”

As streaming giants such as Netflix embrace ad-supported content tiers, Roku also stressed at NewFronts that the company complements but does not compete with streaming businesses.

“Netflix, Hulu and Disney+—50% of all Super Bowl streaming took place on Roku this year,” said Charlie Collier, president of Roku Media.

Roku is not the first business to turn interstitials into ad opportunities. For instance, Peacock’s Pause Ad is something of a “younger brother” to Roku’s interactive screensaver. Pause Ad offers an ad initiated by the viewer when they pause what they’re watching. A static brand advertisement takes over the screen after a video has been paused for more than five seconds, typically with messaging that is contextually relevant and calls attention to the pause.

Why the News Matters

This news matters because Roku is a major player in the fast-growing connected TV industry. For the first time, streaming viewership topped cable in 2022, and this trend is not going to reverse course as cord cutting continues. As reported in Axios recently, traditional television companies and major media firms are bracing for further declines in the ad market and yet another increase in cord-cutting this year. At True Interactive, we believe it’s important that businesses understand the growth of advertising on streaming platforms in context of the rise of connected TV. If you’ve not done so already, take a closer look at why connected TV is growing and how it could expand your audience. (True Interactive can help you with that.) Connected TV is enjoying 60-percent growth, driven by a public’s appetite for streaming that continues unabated.

Connected advertising is similar to linear TV advertising because both formats rely obviously on video. But connected TV is different in many important ways. For one thing, advertisers need to understand how to create video content that will reach viewers across a variety of viewing devices in addition to TV screens, and connected TV ads are competing with multiple content streams.

Contact True Interactive

True Interactive can help you navigate the connected TV landscape. Our services range from media strategy and planning to automated performance reporting. Learn more about our services here, and contact us to learn more.

Why the Demise of the Google/Meta Ad Duopoly Is Good News

Why the Demise of the Google/Meta Ad Duopoly Is Good News

by Tim Colucci Google Meta Walmart

Recently there’s been some considerable discussion about the demise of the so-called advertising duopoly. This refers to the speculation that Google’s and Meta’s dominance of the online advertising industry is fading as their share of online advertising shrinks. As reported widely, Google and Meta are expected to bring in less than half of all U.S. digital advertising in 2023 for the first time since 2014. Here’s what the number say:

  • Google and Meta will together capture 48.4 percent of all U.S. digital ad revenue in 2023 — 28.8 percent for Google and 19.6 percent for Meta — down from 54.7 percent at their peak in 2017, when Google’s ad revenues account 34.7 of the market, and Meta accounted for 20.0 percent. per data from Insider Intelligence.

But let’s not shed any tears for Google and Meta. They are doing just fine. Google generated an astounding $282 billion in advertising in 2022. And Meta, following a difficult 2022, is rebounding strongly as the business shifts its advertising model from tracking third-party cookies to first-party customer data.

No, the duopoly isn’t fading, exactly. But the online ad world is getting more crowded. For instance:

Amazon Ads is nearly a $40 billion business.

  • TikTok is expected to earn $8.6 billion in ad revenue in 2024 – assuming TikTok doesn’t get banned in the United States.
  • A host of retailers ranging from Walmart to Walgreens have entered the online advertising, business. They’re using Amazon Ad’s blueprint: tap into the consumer behavior data they collect from their own customers (known as first-party data) to develop targeted ad products. Retail media at the global level is forecast by WARC to be the fastest-growing marketing channel this year, reaching $122 billion in revenue.
  • Several companies outside of retail such as Airbnb and Uber are doing the same thing with their first-party data as retailers are: developing ad businesses. They’re smaller, but they are significant.

The growth of Walmart’s ad division, Walmart Connect, is an example of how varied the online advertising world has become. Recently Walmart said that Walmart Connect grew 41 percent year-over-year in the fourth quarter of 2022. Its ad operations were up 20 percent over the period and jumped nearly 30 percent in 2022, generating $2.7 billion for the full year.

Walmart enjoys a significant advantage: it operates a strong eCommerce business to complement its mammoth chain of retail stores. This gives the company a large audience online and offline to develop and deliver targeted ads. During the runup to Black Friday during the 2022 holiday season, Walmart even enjoyed stronger search traffic than Amazon did.

Walmart has developed several ad units. They include:

  • Search to make products found on Walmart’s digital sites such as Walmart.com.
  • Display on Walmart’s site and across the web.
  • In-store to make a brand visible on digital ads in Walmart stores, such as in self-checkout lanes, or as a “commercial” on in-store TVs adding to the number of replacements for linear TV.

A number of businesses, such as Kraft Heinz, report improvements in sales lift by working with Walmart on ad campaigns across Walmart properties.

The rise of alternatives to Google and Meta is good news for businesses for a few reasons:

  • More competition gives advertiser more choice. The rise of retail networks is a good example. Businesses can tap into more refined first-party data from each retailer to target different audiences. For instance, the Macy’s media network gives advertisers entrée to a more style conscious consumer.
  • More competition means that Google and Meta need to improve their own ad products. For instance, the popularity of TikTok has forced Meta to develop short-form video content, Reels, with ad products to go with them.

We suggest advertisers capitalize on the proliferation of ad platforms wisely. Focus on the platforms that provide the strongest ROI while experimenting with emerging platforms that are aligned with an audience you have been wanting to reach (e.g., TikTok for Gen Z) and channels that are untapped to you.

At True Interactive, we can help. We possess experience with both the established ad platforms and emerging ones. Learn about our services here.  Contact us to learn how we can help you.

Photo by Brett Jordan on Unsplash