Walmart revealed advertising revenue for the first time on Thursday, saying that it generated $2.1 billion last year, a strong sign that its retail media ad strategy is starting to click.
Walmart disclosed the advertising money pile during its fourth-quarter earnings announcement. Walmart has been building a retail media network, which serves search ads for brands that sell products on its website, just like Amazon. Walmart also runs a demand-side platform, an online ad buying network that it built with The Trade Desk, an internet media buying and ad technology firm.
Walmart Connect is the name for the advertising side of Walmart’s business. Last year, Walmart launched the demand-side platform as a way for brands to tap into Walmart’s shopping data to target ads around the internet.
Walmart did not disclose all the details about the strength of its ad business. For instance, there was no comparison to revenue in the prior quarter or the year before. In its call with Wall Street analysts, Walmart said that half the advertising revenue came through automated channels. Brian Wieser, global president of business intelligence at GroupM, said that was an indication of the size of programmatic digital advertising coursing through Walmart's platform. Walmart also has direct relationships with brands that buy marketing and advertising services like physical promotions in the stores.
Still, no matter how it is sliced, Walmart is approaching the size of Pinterest's ad business, Wieser said. Pinterest generated $2.6 billion in revenue last year. "It shows tremendous advertiser interest in retail media," Wieser said. "Not just CPG brands, but marketers in other industries, as well."
Earlier this month, Amazon reported $9.7 billion in fourth-quarter ad sales, an increase of 32% from a year earlier. It was the first time Amazon specifically carved out advertising revenue.
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