Walmart is revealing more details about its coming ad platform, including an October launch date, and the retailer tells Ad Age that the new ad network is designed to withstand the pending collapse of cookies.
On Wednesday, Walmart announced that the Walmart DSP, which is the acronym for “demand-side platform,” an automated advertising exchange, will be ready to serve advertisers in October. In January, Walmart said that it would build the DSP with The Trade Desk as a partner. Walmart’s advertising and media business is called Walmart Connect.
“It opens up a lot more opportunities for advertisers … it’s really using [The Trade Desk’s] technology with our first-party identity,” says Rich Lehrfeld, senior VP, Walmart Connect. Lehrfeld added that the DSP allows “advertisers to really access first-party data, to get down to a SKU level, to get down to product SKUs, that is not something that is really in the marketplace on a DSP.”
Product SKUs, or "skews," is the acronym for "stock keeping units," a code that is common in retail to categorize product details and track inventory. That is the type of data that Walmart can analyze, seeing what customers purchased and the exact product details. Brands can use those details to inform ad campaigns, and those campaigns can reach beyond Walmart’s own websites. Walmart has previously had some media buying capabilities outside its own site, but Lehrfeld says this new DSP will open up the buying even more.
Walmart’s DSP is part of the retailer’s plan to compete with Amazon, Target and other retailers that are also developing media services that help brands buy ads across the internet. Amazon has made advertising a significant part of its business, and ad revenue was close to $8 billion in the second quarter, growing at 83% year-over-year. Walmart does not break out exact ad revenue, but it said ad revenue grew 95% year-over-year in the second quarter with the number of advertisers rising 175% year-over-year, in its latest financial report.
Walmart’s DSP is a self-serve platform, meaning the brands manage their own campaigns with the help of agency partners or Walmart’s managed services teams.
The ad platform also relies on data that Walmart can collect on shoppers who visit its website and make purchases in stores, Lehrfeld says. The data will be tied to a Walmart ID, which the retailer developed to help brands plan for new privacy regulations that are making it harder to track consumers online. Apple and Google, which control vast swaths of the internet through browsers and devices, are limiting how data gets collected across websites and apps.
“It’s all first-party data,” Lehrfeld says. “So we look at our data, we append an ID on to it, we are looking at a post-cookie world.”
The ID can then pass through The Trade Desk to match with consumers on websites outside of Walmart.com or to build audiences that share characteristics with existing customers. That way brands can prospect for new customers.
The Trade Desk is developing a new ID, too, to replace older technology like third-party cookies, which have traditionally been the method of tracking web activity and targeting ads. Lehrfeld says that Walmart is exploring ways to integrate with The Trade Desk’s Unified ID 2.0.
Walmart also has been building its data operations with a new unit called Walmart Data Ventures, which gives brands more insights and analytics that in turn could entice more ad spending, too.
The Walmart DSP will have access to all of the advertising inventory that is available through The Trade Desk. The Trade Desk has its own ad marketplace with direct relationships with publishers and ad exchanges, and it can serve ads to connected TVs, websites and apps.
Lehrfeld says that Walmart had considered building its own DSP, similar to Amazon, but ultimately the retailer decided to build on top of The Trade Desk. “At a much larger level it allows us to tap into new advertisers, new budgets,” Lehrfeld says.