Walmart is moving its website ad sales in-house from WPP's Triad to help accelerate Walmart Media Group, which also includes the WMX programmatic exchange. This aggressive media push shouldn't just raise competitive fears inside Amazon, but also within the Google-Facebook duopoly. That's because the retail giant's ambitions could result in a formidable retail media sector fueled by superior sales data.
It's one factor that could propel U.S. retailers to collectively surpass Facebook in U.S. digital ad sales by 2021 or 2022, says Michael Stich, chief business officer of WPP's VMLY&R and head of the agency's advisory practice.
Facebook last year had just under $33 billion in U.S. ad sales, per eMarketer, but Stich expects that to plateau amid stagnant U.S. usage of the social network.
Walmart likely has $2 billion to $3 billion in annual digital ad sales already, but could grow that to $5 billion within a couple of years, Stich says. He estimates Amazon ad sales now at $15 billion. And he says that Kroger Co., which only in recent years has developed substantial digital ad revenue from its online grocery business, now has nearly $1 billion in digital ad sales, similar to Target.
Behind those four are numerous regional chains such as H-E-B that Stich thinks will find it harder to compete with bigger players. But he believes Walmart has the data and scale to capture revenue from players, such as Clorox Co., that have said rising costs are making them moderate Amazon spending.
Walmart's more aggressive posture "should be a major concern at both Facebook and Google," says Jeff Greenfield, chief operating officer and co-founder of marketing attribution firm C3 Metrics. "With the strongest retail base in the U.S. and massive amounts of shopper data, Walmart's entry and Amazon's growth will dilute Facebook and Google's share of brand dollars by 25 percent over the next 18 months."