Wal-Mart Offers Ads Via Yahoo

Portal Will Be Primary Channel for Display and Video on Retailer's Site

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NEW YORK (AdAge.com) -- Want to buy an ad on Walmart.com? Talk to Yahoo.

Last week the portal announced a pact to sell display and video advertising on Walmart.com through its publisher network. Advertisers can target Walmart.com users granularly, down to what kinds of products they have put in their shopping carts.

Clearly the deal is a good one for Yahoo, which gets access to very targeted, intent-driven web-surfing data. And the deal is likely to work for Walmart.com, which could supplement its e-commerce business with a healthy dose of ad revenue. The deal could be good for advertisers, too -- that is, if they don't feel unnecessary pressure to buy, turning the opportunity into a de facto slotting fee and drawing comparisons to the early days of Wal-Mart's in-store TV network.

But advertisers shouldn't confuse Yahoo's deal to sell advertising on Walmart.com as Premiere Retail Networks part deux. For one, the biggest complaints leveled at PRN, which sells advertising on video screens in Wal-Mart stores, were that marketers felt they had to buy to curry favor with the retailer -- which buys and merchandises their products -- but had little good data to back up whether the media buy actually worked for them.

"This feels like it's a win for everybody -- for Yahoo, Wal-Mart, advertisers and consumers," said Tracey Parsons, director-client services at Resource Interactive, of the Yahoo deal. "And that combination automatically makes me concerned."

More accountable
While she said that last part with a chuckle, there will surely be many package-goods and other brand manufacturers closely watching the rollout of the sales agreement between Yahoo and Walmart.com to see exactly how much Wal-Mart may push the opportunity and what kind of effectiveness it brings to marketers' online media buys.

One online veteran of package-goods marketing said there would probably be perceived pressure to buy Walmart.com, but conceded that the early issues surrounding PRN -- that there was little targeting or accountability -- will not be as big of a problem with the Yahoo offering because of the nature of the web. Online advertisers can target to specific actions and behaviors and track what kinds of ads deliver conversions.

It's the targeting possibilities that present the biggest opportunities for marketers, Ms. Parsons said. But the targeting possibilities also paint a picture of a more competitive online shopping experience.

"If I'm Magnavox, and I've got a rollback [price] on a 47-inch HDTV, and I know somebody put a Sanyo 50-inch TV in their shopping cart, I can make them a better offer," she said. "I'm eliminating clutter and saving marketing dollars by pushing out targeted offers."

Blocking competitors
The question for Wal-Mart is whether it will make more money through the deal. If Walmart.com shoppers are served ads from a manufacturer not carried by Wal-Mart, will the retailer lose sales? Yahoo said in its experience selling ads on eBay, the answer to that has been no.

Plus Walmart.com, like any publisher in Yahoo's network, can block certain advertisers -- competitive retailers, for example -- from advertising on its site. And Yahoo said it will not use Walmart.com data for selling to competitors, meaning it cannot retarget a customer who abandoned a shopping cart on Walmart.com with a Target ad for the same or similar products.

"We're working closely with the Walmart.com management team," said Todd Teresi, senior VP of the Yahoo publisher network. Through the Walmart.com deal and another deal to sell ads on eBay, plus its own Yahoo Shopping properties, the portal's execs say they can reach 76% of the web's retail audience.

"If you want to reach engaged, in-market shoppers, then you need to start your advertising buy with Yahoo," Mr. Teresi said. "No one else can say that."
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