Walmart Takes On Amazon in Adtech

Walmart, the largest retailer in the world, is cranking up efforts to compete more intensely with rival e-tailer Amazon in targeting online shoppers.

The retail behemoth has announcedOpens a new window its purchase of San Francisco-based advertising technology company Polymorph Labs, a move that should help Walmart in its ambition to build an ad platform capable of rivalling Amazon’s.

Polymorph’s ad technology and assets – which include a high-speed ad server, a self-serve interface and server-side header bidding – will help Walmart deliver the most relevant ads in real time to specific online shoppers.

Moreover, the company says advertising will become easier for clients in that space and, thanks to Polymorph’s high-speed client-side server, will allow ads to be delivered quicker than is normally possible.

The name of the game here? Audience targetingOpens a new window .

The technology Polymorph brings to the table will streamline the process for marketers and advertisers that sell through Walmart to target audience segments based on shopping preferences and behaviors.

The acquisition comes in a larger play by Walmart to grow its advertising business through its Walmart Media Group unit. The new technology aligns well with Walmart’s other adtech investments, such as its omni-channel ad-targeting and measurement solution.

By combining these technologies, the firm should be able to develop other ad servicing capabilities, including real-time auctions across various pricing models (for example, cost per impression, cost per conversion and cost per click).

As impressive as these moves sound, are they really enough to take on Amazon?

Competing with Amazon won’t be easy

Going head-to-head against Jeff Bezos’ baby is no small task. In recent years, Amazon has become the new advertising giantOpens a new window on the block, challenging the long-held Google-Facebook online advertising duopoly.

Indeed, Amazon’s ad revenue business has grown at an impressive rate, with global ad revenue doublingOpens a new window from 2017 to 2018 and surpassing $10 billion for the first time (some 60% from the US). In fact, its marketing-related revenue was higher in the fourth quarter last year ($3.4 billion) than for the whole of 2017 ($3.3 billion).

Notably, although the majority of Amazon’s $233 billion business is from online retail, its highest growth area is “other services” (120% growth in 2018) – a segment that consists almost entirely of advertising revenue.

Driving this growth for Amazon is the unique advertising service it can offer clients that most of its competitors can’t match: extensive amounts of consumers’ actual purchase data.

As the data revolution continues to create innovative ways for marketers to make use of every new data point now available, Amazon can provide key customer insights that are convincing many marketing leaders to spend their ad budget on its platform.

I’d say the fact that agencies and consultancies are now specializingOpens a new window  specifically in helping brands leverage the Amazon ecosystem is proof of the e-tailer’s newfound standing as a digital advertising powerhouse.

Walmart takes a page from Amazon’s playbook

If Walmart is intimidated by Amazon’s exponential growth in online advertising, it doesn’t show. Rather, I think the retailer has looked at Amazon’s growth and analyzed the market to identify the key drivers of its rival’s success.

Clearly, Amazon’s most powerful adtech weapon is its ability to go hyper-granular in the analysis of the consumer data it fields from its sales department.

That, coupled with Amazon’s self-serve platform that gives brands an automated system to manage ad campaigns, has helped the online retailer consolidate its position as a one-stop-shop for sales and advertising.

Walmart clearly has taken note that advertisers are increasingly looking for platforms that can connect them with consumers in cutting-edge ways – especially those featuring a straightforward, user-friendly system.

Benefits of integrating Polymorph’s ad tech for Walmart’s clients include real-time capabilities for managing ads and spend, sophisticated ad targeting and measurement tools. As Walmart noted in a blog post, the acquisition “will enable both existing and new advertisers to control their advertising tactics and spend in real-time and reach their desired audiences more effectively.”

Meanwhile, the retail giant is also planning future innovations through Polymorph’s platform, not least by incorporating machine-learning models for optimizing ads.

What sets Walmart apart from other ad servers trying to compete with Amazon? Its copious data on consumers: Walmart gets 160 million visitors to its stores and websites every week. By comparison, Amazon has about 100 million total Prime members.

Such omnichannel data is a huge boost to brands and companies looking to track shoppers across the customer lifecycle. It will give Walmart advertisers the capability to pick and choose audience segments based on shopping behavior.

As Stefanie Jay, vice president and general manager of Walmart Media Group, wrote in a corporate blog post: “We can help brands understand if someone saw their ad on Walmart’s platform or across the internet, and then purchased the product in-store or online. No one else can do this at scale like Walmart.”