Why the NFL on Amazon Prime Is a Victory for Connected TV

Why the NFL on Amazon Prime Is a Victory for Connected TV

Amazon

For decades, watching NFL games on television has meant gathering in front of a TV set and watching a game on one of the major networks. NFL games have been events that vanquish the competition. Featured programming such as Sunday Night Football, Thursday Night Football, and Monday Night Football have dominated viewer ratings. All of this is still the case. But how we watch football is changing.

On September 15, the NFL officially entered a new era of television broadcasting when the Kansas City Chiefs and Los Angeles Chargers took the field for Thursday Night Football. Instead of televising the game on an established linear TV network, the NFL streamed the match-up on Amazon Prime as part of a $13 billion, 11-year deal with Amazon.

The game marked the NFL’s official embrace of streaming. It also meant that to watch TNF going forward, football fans would need to sign up for Amazon Prime, which is Amazon’s premium service costing $139 annually. And so far, it looks like fans are willing to pony up. According to an internal Amazon memo, the September 15 broadcast drew a record number of Prime sign-ups for a year-hour period.

Given the popularity of the NFL – easily the most dominant brand on TV based on viewer ratings – the streaming agreement has significant ramifications for advertisers. Notably, this is a victory for connected TV, which means watching TV content through a device such as Roku or Amazon Fire. Many people refer to connected TV as over-the-top (OTT) TV, which refers to streaming content directly over the internet instead of cable, broadcast, and satellite television platforms. Although technically the two terms differ – with connected TV referring specifically to the device people use to stream content – for all intents and purposes, they are the same. Whatever you want to call it, connected TV has arrived: streaming is now more popular than cable. It’s no longer optional for businesses to have an OTT advertising strategy.

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. (You can watch TNF on a laptop, mobile phone, or gaming console with multiple screens open.)

And each streaming service and connected TV device (ranging from Amazon Fire to Roku) offer their own ad units. For example, Amazon Ads, which is Amazon’s fast-growing advertising business, offers ad units such as inline ads (which appear as selectable rows in each major browsing section of Fire TV) and feature rotator (a carousel-like ad placement appearing above the fold of the screen).

Ahead of the launch of TNF on Amazon Prime, Danielle Carney, Amazon Ads’ Head of NFL Sales, said:

We’re offering myriad opportunities to get involved with TNF, catering to brands’ range of needs. Our premier sponsorships give advertisers the ability to elevate their brands during the pre-game, pre-kick, halftime, and post-game shows. But that’s not all. We’re continuing to innovate and explore other potential sponsorships and packages that will enable brands tell their stories in unique ways through our surround, alternate feeds, and ancillary programming. Our newly built creative sports team will help customize the experience for our partners.

Outside of sponsorships, brands can use Streaming TV ads to reach fans throughout games on Prime Video and Twitch. Like our sponsorships, these video ads are backed by Amazon’s first-party insights, bringing more value and insight into campaign performance for brands.

To succeed, though, Amazon Prime needs to deliver viewing numbers to advertisers. Reportedly, Amazon has told advertisers that it expects to see nightly viewership of about 12.5 million people for its inaugural season of TNF. We’ll soon see. Amazon agreed for Nielsen to track ratings for TNF, and ratings for the September broadcast are still forthcoming.

Amazon Prime also needs to deliver a desirable experience. Amazon promises alternative ways to watch TNF, including Dude Perfect, a popular trick-shot comedy group. Amazon Fire TV and Alexa are bringing new features to NFL fans as well, such as trivia and real-time access to statistics (which should appeal to Fantasy Football devotees). Early fan reactions to the September 15 broadcast were mixed, and it looks like Amazon has some technical issues with content buffering to fix. Of course, no one can predict the quality of an actual NFL game, but Amazon can certainly deliver on the overall experience. Let’s see how Amazon adapts.

The broadcast is also significant for another reason: a victory for first-party data, which is the information that businesses collect directly from their customers. Amazon will use first-party data to sell targeted ads to help drive revenue for the games. This is huge. Right now, third-party audience data is withering away thanks to Apple’s and Google’s privacy measures. Businesses that figure out how to monetize first-party data enjoy an enormous advantage. Amazon has already become the third biggest ad platform in the world (behind Google and Meta) by using first-party data to sell targeted ads. The ascendance of first-party data is one reason why retailer-based ad networks have become so popular.

Bottom line: what is your advertising game plan for connected TV?

Contact True Interactive

To succeed with connected TV advertising, contact True Interactive. We have deep experience with this format.

How Apple Will Grow Its Advertising Business

How Apple Will Grow Its Advertising Business

Apple

Apple changed the advertising industry when the company launched an important privacy control in 2021, Application Tracking Transparency (ATT).  ATT asks iPhone users to decide whether apps can track them across other applications and websites. After the introduction of ATT, 62 percent of iPhone users opted out.

This has created a problem for advertisers and ad tech platforms such as Meta that rely on the ability to track user behavior across the web in order to serve up targeted ads to them. Without tracking user behavior via third-party cookies, their ads are less personalized. Meta said that ATT would cost the firm $10 billion in revenue in 2022. Apple, for its part, justified the new privacy control as taking a stand for consumer privacy.

Well, we now know Apple had something else in mind with ATT: taking a stand for Apple’s advertising business.

As Bloomberg reported recently, Apple is now earning $4 billion in revenue annually by selling ads on its devices, and the company plans to grow that amount aggressively. Granted, $4 billion is a far cry from the $209 billion that Google pulled down from advertising in 2021, but Apple’s newfound focus on ads sure casts its consumer privacy push in a different light.

How Does Apple Earn Ad Revenue?

Apple makes money selling ads on spaces that people see all the time on their iPhones and connected TVs as they navigate their screens to download apps, read the news, and watch content. Those include:

  • The App Store, as shown here:

Apple Ads

  • Apple’s own News and Stocks apps.

The additional ad revenue will come from:

  • The Today tab (the home page of the home page of the App Store, which includes content ranging from App of the Day to Game of the Day).
  • The You Might Also Like section of the App Store (this is found at the bottom of the App Store).
  • Third-party app download pages.

Does ATT Apply to Apple?

How will Apple sell targeted ads? By collecting first-party data, meaning the information that users of Apple devices cough up to Apple whenever they use the App Store, News and Stock apps, and so on. And, by the way, Apple will not make it easy for users to opt out of having their data tracked. You can disable the ad personalization feature, but you have to look for it under Apple Advertising in the settings app’s Privacy & Security menu. There is no pop-up menu asking you if you’d like to have tracking disabled as is the case with ATT, as shown below:privacy noticeBut shouldn’t ATT also apply to Apple? Not in Apple’s view. According to Bloomberg:

You may ask then, why don’t Apple apps have to ask permission to track users via a pop-up message? That’s what happens with other apps under ATT.

The reason, Apple says, is that the system “does not follow you across apps and websites owned by other companies.” That’s what ATT is designed to prevent. If a third-party app doesn’t track across outside apps and websites, it also doesn’t need to show a pop-up.

The “we are exempt from our own policy” rationale is how Google justifies its plans to kill third-party cookies on the Chrome browser. Google apps such as YouTube are exempt because technically they collect first-party data, not third-party data.

It’s easy to connect the dots and see what’s going on here: by attacking third-party cookie tracking, Apple bolsters its own ad program, which relies on first-party data collection.

Apple’s ad business is far too small to threaten the lead enjoyed by Amazon, Google, and Meta. But Apple has the muscle and money to grow its business quickly. ATT was a declaration of war.

What Advertisers Should Do

  • Understand the big picture. There is no going back: tech firms such as Apple and Google are undercutting the value of third-party cookies. Accept the reality that as third-party cookies crumble and technology companies enact privacy controls, your ads will be less targeted than they were. This does not mean you should stop advertising online. Online advertising remains the most efficient and cost-effective way to reach your audience. At the same time, first-party data is more valuable than ever to advertisers as a means to creating targeted ads. Consider ad platforms such as Amazon Advertising and Walmart Connect, which give businesses entrée to a vast base of customers who search and shop on Amazon and Walmart. True Interactive offers services on both platforms in addition to our longstanding work on Google, Bing, and other platforms. Learn more about our services with Amazon Ads here and Walmart here. Apple and Google cannot undercut what these companies are doing.

True Interactive can help you navigate the ever changing world of consumer privacy and advertising.

Contact True Interactive

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

Lead image source: https://pixabay.com/photos/apple-inc-mac-apple-store-store-508812/

 

 

 

Where Amazon, Google, and Meta Are Headed

Where Amazon, Google, and Meta Are Headed

Amazon Google Meta

Technology earnings week is always watched closely. The rising and falling fortunes of Alphabet (Google), Amazon, Apple, Meta, and Microsoft have a direct impact on adjacent industries such as retail, advertising, and marketing. During a topsy turvy year such as 2022, the most recent quarterly earnings announcements of the Big Tech firms were followed especially closely. And here are some of the highlights from the Big Three of online advertising – Amazon, Google, and Meta — with implications for online advertising:

  • Amazon beat analysts’ estimates and enjoyed a strong quarter with the exception of its core retail business. The big news was the continued strong growth of Amazon Ads, which is Amazon’s advertising business that has quickly challenged Google and Meta for leadership of the online ad market. Ad revenue climbed 18% in the period for its most recent quarter. All told, Amazon Ads raked in $8.76 billion in the second quarter. Notably, in its earnings announcement, Amazon highlighted the recent launch of Amazon Marketing Stream, which “automatically delivers hourly Sponsored Products campaign metrics to advertisers or agencies through the Amazon Ads API.” This is a sign that Amazon is developing ad tech data and marketing services, which is a direct challenge to Google. What it means: the success of Amazon Ads dovetails with the ascendance of a more privacy-focused era. Apple in particular has initiated privacy controls that make it more difficult for advertisers to target consumers with ads that use third-party data. Amazon Ads is beyond the reach of such privacy controls because Amazon Ads is based on first-party data that Amazon collects from its customers. Amazon is not the only retail business building its own ad network. But it’s the leader. We expect more businesses will choose Amazon Ads as an advertising platform, and we have developed services accordingly.
  • Meta suffered its first-ever revenue drop for the quarter. The reasons are complicated. First off, TikTok is threatening the popularity of Facebook and Instagram (both owned by Meta), and Meta’s response to TikTok, Reels, doesn’t generate money as efficiently as Instagram Stories and the main news feed. Meta has also reeled from the impact of Apple’s privacy controls. What it means: Meta is in a time of transition – but never count out Meta. The company is investing heavily into the emerging metaverse, which is dragging its profits down but may boost Meta over the long run. And although Reels are a work in progress, progress is being made. As analysts at JMP wrote, “With Meta making progress with Reels while AI improves recommendations across content and advertising, we expect growth to rebound from current levels while the company is more disciplined in its cost structure.” And, overall, the company’s base of monthly active users continues to increase. The real threat to Meta in the near term: how well the company can rebound from the threat of Apple’s privacy controls. The long-term threat: how well Meta can attract and keep Gen Z users.
  • Google is sitting pretty. Alphabet’s search ad sales grew more than 13 percent in Q2 2022 to $40.7 billion, beating analysts’ expectations of $40.2 billion. Search, of course, is Google’s bread-and-butter business, and Google’s investments into its core search ad units are paying off as advertisers lean into performance marketing tactics amid economic uncertainty. But life isn’t all rosy at Google. At YouTube, ad sales rose 0nly 5 percent after jumping 84 percent in the same period a year ago. This reflects the impact of TikTok’s popularity. What it means: Google is going to flourish in 2022 and 2023 especially as advertisers weather economic uncertainty. Google is a safe bet, and Google continues to develop new ad units that enhance its performance marketing capabilities. Watch for Google to continue to push artificial intelligence-related services and tools that automate online advertising — while managing the increasingly thorny challenge of developing alternatives to third-party cookies, which the company had said it would do by 2022 and now is rescheduling for 2024.

What Advertisers Should Do

  • Keep a diversified ad portfolio across the Big Three: Amazon, Google, and Meta. If you are satisfied with the results you are seeing, don’t let Meta’s challenges scare you away. But do a gut check with your agency partner on how your ads are performing.
  • Work closely with your agency partners to understand the impact of privacy controls, especially from Apple.
  • If Gen Z is an important audience, take a closer look at TikTok. TikTok looms large as it challenges YouTube and Meta especially.

Contact True Interactive

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

Three Takeaways from Amazon Prime Day 2022

Three Takeaways from Amazon Prime Day 2022

Amazon

Amazon has announced that Amazon Prime Day 2022 was the biggest Prime Day Event ever. Prime members purchased more than 300 million items worldwide during Prime Day 2022, which took place July 12-13. Amazon did not disclose sales results, but the 300 million items purchased was up from 250 million in 2021, and research firm Numerator estimates that spend per household neared $200, up from the high $150’s in years past. This is an impressive measure especially amid soaring inflation. So, who is buying all this stuff, what are they buying, and how are they buying? This is a significant question. The answers give advertisers clues about online purchasing behavior during inflationary times. Well, Numerator took a close look at the numbers. And they say a lot.

Women Drive eCommerce

High income, suburban women were top Prime Day 2022 shoppers. Compared to Prime Day 2021, this year’s shoppers were marginally older, and slightly more likely to come from middle or low income rural households.

Women dominate Prime Day

These figures validate why brands market to women. Women are responsible for most purchases in a typical household, and since there are 3.9 billion women in the world, marketers are eager to gain as much of their spend as possible. But marketers need to be mindful to tailor their advertising to women – for example by respecting their diversity and steering clear of tired themes (such as always depicting moms as caretakers and nurturers).

Amazon Wins by Tapping into Its Customer Base

95 percent of households knew it was Prime Day before shopping, and most learned about the event directly from Amazon. Among those who were aware of the sale, 41 percent say it was the primary reason they shopped on Amazon and another 42 percent said it was a contributing factor. And Amazon dominated the list of most popular products sold.

Amazon dominates Prime Day

These numbers underscore the power of Amazon to capitalize on its built-in customer base by promoting big ticket events to them. Amazon has successfully developed hundreds of in-house products and brands, and the company knows how to market them to Prime members.

This will pressure businesses to get out in front of big-tent sales such as Back-to-School, Black Friday, and Cyber Monday even more so than they have, especially by re-marketing and advertising to their own customers. This is especially true during inflationary times. One third of Prime Day shoppers waited to buy something until Prime Day, with another 17 percent using the event as an opportunity to stock up on sale items. On the flip side, over a fourth of Prime Day shoppers passed up a good deal on a non-necessity. Businesses will double down on special sale days in 2022, knowing that their customers may very hold out for promotional specials to maximize savings.

It’s also worth noting that Amazon didn’t dominate every product sold, with products such as Dawn Dish Soap, Frito-Lay, and Tide doing well. Businesses have learned that it’s better to join Amazon than to try and beat the retailing giant. And retailers who tried to compete with Amazon by creating their own quasi-Prime Day events did not succeed: although 54 percent of Amazon Prime customers considered buying from other retailers during Prime Day (particularly Walmart and Target) only 24 percent actually made purchases elsewhere in addition to Amazon, with about one-in-ten still considering a non-Amazon purchase at the time they were surveyed.

This is why Amazon Ads is succeeding: the company has monetized all the data it collects about its customers and developed attractive ad units for companies that want to reach them. The advertising arm of Amazon achieved 32 percent year-over-year growth in 2021, which amounted to $31.2 billion in revenue. Amazon Ads will continue to be a huge growth engine for Amazon, as more businesses try to reach the customers searching for things to buy on Amazon every day. (Amazon is now bigger than Google for product searches.)

Live Stream Shopping Is on the Rise

Amazon noted that Amazon Live Prime Day streams had more than 100 million views. Thousands of users hosted livestreams during this year’s event, Amazon said. Livestreaming makes it possible for advertisers to sell products via live demonstrations and promotions. Live shopping is especially big in China: according to eMarketer, live shopping accounted for nearly 12 percent of China’s retail ecommerce sales in 2021. Coresight Research estimates the live-stream shopping market will reach $20 billion in 2022 and grow to roughly $65 billion by 2023. Several livestream platforms have proliferated. But livestream shopping needs to be done well, with great production values and authentic, engaging personalities to connect with shoppers. This is why businesses are turning to ready-made platforms such as Amazon Live.

Contact True Interactive

To succeed in Amazon’s world, contact True Interactive. Our experience with Amazon Ads makes us well suited to help your brand succeed all year-round.

Amazon’s Next Frontier: Local Advertising

Amazon’s Next Frontier: Local Advertising

Amazon

Amazon recently announced for the first time just how big Amazon Ads has become. And the number is very big. As in $31.2 billion. Amazon said in its in 2021 earnings announcement that Amazon Ads had achieved 32 percent year-over-year growth, which includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising.

$31.2 billion is not quite the size of Meta’s and Google’s ad businesses. By comparison, Google achieved $209.5 billion in ad revenue for its most recent fiscal year, and Meta achieved roughly $115 billion for the same time period. But Amazon Ads eclipses Microsoft, Pinterest, and Snap, and the company has earned a place alongside Google and Meta as one of the big three online advertising platforms.

And now, it looks like Amazon plans to get bigger in an untapped market: location-based advertising. Business Insider reported recently that Amazon is building a local ad business by advertising positions for a Local Ads team in major cities such as Chicago and New York. Apparently Amazon Ads will offer a slate of ad units, including streaming TV ads and a demand-side platform that sells ads off Amazon’s website. (Note that Amazon generates the lion’s share of its ad revenue from search ads that appear on the Amazon website; but Amazon has invested more in ad tech to get bigger ad budgets from advertisers.)

This is an intriguing development, to say the least. Location-based advertising capitalizes on the fact that local searches by consumers are wildly popular. This is a big reason why hyper local sites such as Nextdoor have achieved strong growth: people typically look for things to buy at stores close to their homes. So, businesses have a strong motivation to rank well in those “near me” searches, and of course advertising can amplify their presence. Meta and Google both offer strong location-based ad services, but lately Meta has taken a financial hit because of the impact of Apple’s Application Tracking Transparency privacy controls, which limit the effectiveness of ad targeting, including location-based ad targeting.

According to a Deutsche Bank report from 2021, 75-percent of Meta’s advertising revenue came from small businesses. Meta could be vulnerable if Amazon’s plans are rolled out. And Amazon doesn’t have to worry about Apple’s privacy controls. The company can sell ads based on first-party data, or data that people on Amazon share when they search and purchase (Apple’s privacy controls do not affect first-party data). Now, consider the fact that Amazon operates brick-and-mortar businesses such as Whole Foods and Amazon Fresh, which rely on location-based advertising. An Amazon location-based ad service could benefit the company’s own stores.

But that’s not all. Just as Amazon sells online ads to merchants, the company is apparently banking on the ability to do that for retailers, automotive dealers, restaurants, and other merchants that need to be present in local search results.

For now, Amazon will continue to grow its ad business mostly through Amazon.com, where companies pay to be listed as a “sponsored product” high up in the search results. Amazon also offers video commercials and ads on Amazon’s FireTV device. Amazon Ads also helps brands with online advertising on sites that it does not own. And Amazon has developed advertising in devices and platforms such as Twitch.

It will be interesting to see how this development plays out especially with Walmart leveraging its own small but growing ad business that capitalizes on the company’s online/offline presence. Walmart could be a strong alternative to Amazon.

We recommend that advertisers manage the online ad solutions that are most relevant to their own customers’ journeys from awareness to purchase. Keep an eye on Amazon. The company has built incredible momentum, and an increasingly privacy-centric landscape favors the growth of its ad business.

Contact True Interactive

At True Interactive, we monitor new ad products all the time and help our clients prosper amid the evolving landscape. Contact us to learn how we can help you. Learn more about our Amazon Ads services here.

Why Google Is Integrating Search and Shopping

Why Google Is Integrating Search and Shopping

Google

Google is as big and influential as ever. But one of the downsides of being big and influential is that Google must fight battles on multiple fronts. We recently blogged about Google’s latest moves to combat the threat of TikTok. At Google’s recently conducted Marketing Live event, the company also took aim at Amazon.

Google versus Amazon

Google practically invented search. Google Search remains the engine that drives Google’s multi-billion dollar advertising business. When people use Google to search billions of times a day, advertisers want to appear alongside their search results. But, in recent years, Amazon has emerged as a powerful search engine all its own, especially for when people are searching for things to buy. Most product searches begin on Amazon, not Google. This is a problem for Google. When people search on Amazon, they search with intent to buy. And they’re not shopping as much on Google. Oh, and Amazon is building off that search activity to grow (impressively) the third largest online advertising business.

Google has been trying to change all that.

At Marketing Live, Google announced a number of developments intended to make Google a more attractive destination for shoppers. To wit:

  • Swipeable shopping ads in search. A new ad display pairs organic shopping results with shopping ads, which makes online shopping more visual. The new swipeable shopping feed is available for apparel brands via Search or Performance Max campaigns. These will be clearly labeled as ads and will be eligible to appear in dedicated ad slots throughout the page. This ad type is coming later in 2022.

A Google ad

  • Product feeds for a shoppable YouTube experience. Also at some point in 2022, advertisers will have the ability to connect product feeds to campaigns in order to create shoppable video ads on YouTube Shorts. With YouTube Shorts, people can quickly and easily create short videos of up to 15 seconds, similar to how TikTok and Instagram Reels are used. Shoppable video ads on Shorts helps Google capitalize on social shopping.
  • 3D models of products in Google Search: merchants will be able to have 3D models of their products appear directly on Google Search, allowing shoppers to easily see them in their spaces. In launching this feature, Google said that more than 90 percent of Americans currently use, or would consider using, augmented reality for shopping.
  • Promoting loyalty benefits. In the coming months, merchants will be able to promote their loyalty benefits to potential customers in the U.S. when they’re shopping across Google. Loyalty programs encourage repeat purchase. Google believes that integrating them into Google Ads will benefit retailers. According to Google, using Performance Max campaigns— along with a product feed — businesses will be able to drive more online loyalty sign-ups across YouTube, Display, Search, Discover, Gmail, and Maps.

A loyalty offer

These developments represent the latest wave of changes taking aim at Amazon. Another occurred in the third quarter of 2021 (more about that here). Google’s strategy is to capitalize on its reach. As popular as Amazon is, Google can rely on more touchpoints for advertisers to connect with consumers, ranging from YouTube to Gmail.

Google’s advertising business overall remains very strong although YouTube has been underperforming against analysts’ expectations. One of the reasons Google has grown so well is that the company does not rest on its laurels. The announcements from Marketing Live are evidence of that.

Contact True Interactive

All these developments are exciting, but It can be a challenge for advertisers to sort through the ever-evolving landscape. True Interactive works with businesses all the time to succeed with digital advertising, and that includes advertising in the Google universe. To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Photo by John Schnobrich on Unsplash

Why Walmart Connect Is Winning

Why Walmart Connect Is Winning

Walmart

For the first time, Walmart shared how much money its advertising business, Walmart Connect, is generating. And business is good. In announcing its quarterly earnings February 17, Walmart said that Walmart Connect achieved $2.1 billion in revenue in 2021. Why is Walmart Connect succeeding?

What Is Walmart Connect?

Walmart Connect is the name of Walmart’s advertising business. Walmart Connect creates targeted advertising by capitalizing on the customer data it has accumulated about search and shopping on Walmart.com and in Walmart stores. Walmart Connect offers many ad units. For example, Search Brand Amplifier makes it possible for a brand’s logo, a custom headline, and up to three of its products appear at the top of a web page (on Walmart.com), thus improving brand recognition and showcasing a company’s product portfolio.

What Did Walmart Announce?

In a conference call with Wall Street analysts, Walmart said that Walmart Connect is growing remarkably well. According to Walmart’s Chief Financial Officer Brett Biggs, “Walmart Connect advertising experienced robust sales growth this year with a strong pipeline of new advertisers and large growth opportunities ahead. In fact, the number of active advertisers using Walmart Connect grew more than 130% year over year. And about half of the ad sales came from automated channels in Q4, more than double last year. We expect Walmart Connect to continue to scale over the next few years with plans to become a top 10 ad business in the midterm.”

Why Is Walmart Connect Succeeding?

Walmart Connect is benefitting because the company relies on first-party customer data. Ad platforms that rely on first-party customer data are becoming more attractive as businesses such as Apple and Google make it harder for advertisers to capitalize on third-party customer behavior data to create online ads. First-party data is beyond the reach of these privacy initiatives. That’s a big reason why retailer-based ad businesses are flourishing – and Walmart is not the only one, as we blogged here.

Another reason for the success of Walmart Connect is that the company has offered automated advertising tools. As noted above, in a call with Wall Street analysts, Walmart said that half the advertising revenue in 2021 came through automated channels. This suggests that Walmart is doing a good job offering programmatic advertising — or the use of automated technology for media buying (the process of buying advertising space), as opposed to traditional (often manual) methods of digital advertising.

Although we don’t have any numbers yet, it’s also likely that Walmart’s physical stores will play a role in the growth of Walmart Connect. Walmart Connect sells ads on more than 170,000 screens — including televisions and self-checkout kiosk screens — located inside more than 4,500 U.S. stores. For example, TV Wall Ads provide placement of an advertisement on thousands of in-store TV screens in stores, with the goal being to influence shoppers while they’re making purchase decisions. Keep an eye on the in-store ad units. They are primed for growth as people become more comfortable shopping in stores post-pandemic.

What Should Advertisers Do?

  • Consider retailer-based ad networks as a complement to your existing digital ad strategy, not as a replacement. If your strategy focuses on Facebook and Google, for instance, don’t move your ad dollars over to a retailer network. Remember that Facebook and Google also already offer proven advertising products that capitalize on their vast user base. For example, location-based digital advertising tools help strengthen Google’s advertising services at the local level.
  • 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.
  • Learn more about the ad products that might apply to you – and those products are evolving. In 2022, more retailers will use first-party data to help businesses create more targeted ads off-site – meaning advertising across the web, as well as via connected TV.

Contact True Interactive

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

For More Insight

Why Retailers Are Launching Ad Businesses,” Tim Colucci, January 11, 2022.

Walgreens Doubles Down on Its Advertising Business,” Tim Colucci, May 19, 2021.