Walmart’s advertising arm is expected to rake in nearly $1 billion in sales this year as the retail giant works to expand the nascent business, a new report says.
That would more than double the sales brought in last year by Walmart Media Group, which the Arkansas-based chain launched to capitalize on its trove of shopper data by placing ads for brands on its website and inside its 4,700 stores across the US, Reuters reported Tuesday.
The growth comes as the nation’s largest retailer pursues a politically sensitive deal to invest in TikTok, the popular video-sharing app that analysts have said would be fertile ground for digital ads from Walmart or its partner companies.
A proposal to separate TikTok from its Chinese parent company, ByteDance, would see Walmart and software giant Oracle take a combined 20 percent stake in TikTok Global, a new US-based business set up to run the platform in America. The deal has faced scrutiny from the Trump administration, which has threatened to ban TikTok over concerns that its user data could be shared with the Chinese government.
But Walmart is forging ahead with its advertising business despite the uncertainty around the deal, according to Reuters. The company has used its wealth of consumer data to improve how it targets ads it offers and convinced some advertisers to ink long-term contracts, the news agency reports.
Walmart Media Group nevertheless has much farther to grow to account for a significant chunk of Walmart’s $524 billion in annual revenues or pose a real challenge to e-commerce titan Amazon, which is expected to generate roughly $13 billion in ads this year, Reuters reported.
“It’s going well, and they want it to go very, very well,” a source briefed on Walmart’s plans told Reuters. “There have been very material gains but it doesn’t yet put a dent in Amazon’s lead or Walmart’s top or bottom line.”
Walmart did not immediately respond to a request for comment Tuesday morning. But a company spokeswoman told Reuters that Walmart takes a “strategic” approach to the advertising business.
“One thing we do at Walmart Media Group is make sure that the advertising we’re placing is additive to the customer experience, that we’re not just throwing ads on anything anywhere,” Walmart spokeswoman Molly Blakeman told the news service.
Credit: Source link