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Walmart DSP Coming This October

Published: September 28, 2021

Author: Diana Gordon


Insights from the Experts: eCommerce Series. Diana Gordon, VP, eCommerce & Marketplace Strategy

Walmart recently announced that its demand side platform (DSP) will be ready to begin accepting new advertisers starting in October. Earlier this year, Walmart had announced its plans to build a self-service DSP for advertisers and selected The Trade Desk (TTD) to partner with on the effort.

Largely recognized as the leader in DSP providers, Walmart’s strategy differs from other Retailer Media Platforms such as Amazon and Kroger in that it is choosing to borrow from an off-the-shelf partner versus building their own from scratch.

So What’s Happening?

To launch its DSP, Walmart enlisted a group of active CPG supplier companies (and agencies) – that were already giving Walmart Connect substantial media dollars as part of a larger relationship – the chance to engage in product advisory sessions and beta testing.

The platform is intended to work similarly to Amazon’s DSP, which allows for the use of Amazon’s first-party shopper data to target and address audiences across the web. Walmart will also provide insights to brands (where applicable) on how the media contributes to sales on both Walmart.com and within its brick and mortar stores.

Early on, programmatic traders showed enthusiasm for Walmart’s partnership with TTD, as it would ease the learning curve of having to use a new user interface. However, they also found it complicated in that advertisers who already use TTD for national media would require two separate instances of the platform.

Speed to optimize, along with speed to launch, is another reason for traders to be excited about Walmart’s new DSP. Under its current managed service offering, Walmart Connect struggled to be viewed as a true performance channel due to the slow nature of data sharing. A Walmart sales lift report had historically required a 16 week post-campaign delay, and in-market optimizations could take up to several business days due to the manual nature of the insertion order and campaign management team.

Another interesting angle to Walmart’s announcement was the launch timing – the holiday season is usually not the time to rock the boat, so to speak. However, October signals the start of Walmart’s Q4 and there may be specific logic in the timing, including the ability to secure additional revenue sources for Walmart before the close of the fiscal year in February. Or, it could use the DSP offering as a selling point in the annual upfront negotiations that Walmart Connect conducts with premium advertising partners and brands for the following year.

Implication of Walmart’s Decision

Walmart’s senior VP Rich Lehrfeld told Adweek that Walmart is “not trying to be a walled garden,” citing the DSP’s ability for advertisers to bring both their own data as well as leverage data from TTD. However, we believe brands should engage with an air of cautious optimism, as the emergence of retailer media is truly the beginning of multiple walled gardens.

In their current capacity, most retailer media platforms are only equipped (or willing) to provide advertisers with measurement results within the walls of their own ecosystems. While this data is extremely valuable and actionable as a performance channel, in order for retailer media platforms like Walmart’s DSP to truly compete with the triopoly of Facebook, Google, and even Amazon, they need to be more open to advertisers using their own measurement solutions. Brands looking to expand their data strategy to include retailer media will want to know how that media performs relative to the rest of the market, and that includes driving cross-shop transactions.

Summary

Walmart’s DSP announcement is another step forward in this new era of retailers not just operating as sales channels, but also as media publishers and even data companies. Its decision to partner with TTD is a continuation of Walmart’s strategy to partner with best-in-class tech enablement partners that began when the company launched its self-service search (sponsored products) offering in 2019. We think agencies and brands should be motivated by the new inventory sources, data signals, and measurement validations that Walmart’s DSP will provide, while still remaining cautious about how transparent the new offering will really be.

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