Walmart takes online ad sales in house, dealing huge blow to WPP unit
Bought less than three years ago by WPP, Triad invokes non-competes to stop moves to Walmart
Walmart is taking website ad sales and related analytics work handled by WPP's Triad in house, affecting hundreds of jobs and eliminating the bulk of work for a business WPP acquired less than three years ago.
Triad has told employees it will enforce non-compete clauses of their contracts, even to prevent them moving to Walmart Media Group, which is taking over the ad operations, according to people familiar with the matter. Walmart is expected to add hundreds of employees as part of the move, these people say. The transition from Triad to Walmart is expected to last until at least May.
A Walmart spokeswoman confirmed the account move but declined to comment on the non-compete issue. A Triad spokesman declined to comment.
The WPP unit's stance on non-competes comes even though Haworth, owned 49-percent by WPP, handles media buying for Walmart and corporate sibling Sam's Club.
Triad had $500 million in annual gross revenue and nearly 700 employees at the time of its sale in October 2016 for a reported $300 million, according to The Wall Street Journal. By 2017 Triad reported having 500 employees, after eBay, its second-largest client at the time of the deal, took its business in house. Other key Triad clients include Staples, Office Depot, Kohl's, CVS, Wayfair and Sears, which combined have roughly half Walmart's retail sales.
Triad is part of GroupM's performance marketing group alongside Xaxis. Triad last week dropped the words "Retail Media" from its name and announced a new focus on consulting. The shop is based in St. Petersburg, Fla., but affected employees are dispersed in other offices nationally and globally.
Other major retailers always have run their own media selling operations or brought them in house in recent years, including Amazon and Kroger Co.
The high-margin and fast-growing digital ad business has become strategically important for retailers that make low margins on most everything else. But Gartner's L2 last year found reason for Walmart to be less than satisfied with its piece of the action, estimating Amazon monetizes 16 percent of searches on its website vs. only 1 percent for Walmart.