Dive Brief:
- Walmart has acquired Polymorph Labs, which offers a cloud-based ad serving platform, in a deal whose terms were not disclosed, according to a blog post by the retailer. Polymorph's founders, product developers and engineers will join Walmart Media Group and Walmart Labs.
- Integrating Polymorph's ad tech will help brands that sell through Walmart streamline the process for targeting audience segments based on shopping behavior, serving ads and tracking the results through a self-serve automated platform that enables advertisers to take advantage of header bidding and real-time auctions.
- Benefits to advertisers will also include real-time capabilities for managing ads and spend, sophisticated ad targeting and measurement tools. Walmart is also planning future innovations based on the the platform, including machine-learning models for optimizing ads.
Dive Insight:
The Polymorph deals comes as Walmart is looking to help brands advertise on its platform in the same way that Amazon does. Amazon's moves into the advertising business have helped consumer packaged goods brands sell their products through its online platform and become a quickly growing revenue source for the retailer. If Walmart wants to keep up, the big box chain needs to help connect brands with consumers in more cutting-edge ways. While other retailers, including Target, Albertsons and more, are also looking to ramp up their digital ad offerings for brands, Walmart's acquisition quickly takes its strategy to a new level.
"If they can integrate a real-time bidding auction across multiple pricing models, Amazon won't be the only one taking budget from traditional search," said Scott Shamberg, CEO of Performics US, in comments emailed to Marketing Dive.
"This puts their more traditional competitors on notice — build your media networks fast or get crushed by Walmart's digital and physical ecosystem across commerce."
The Polymorph deal was announced on April 11, the same day that P&G's Chief Brand Officer Marc Pritchard said that digital media needs to reinvented as previous efforts to clean it up have not gone well, during a presentation at the ANA's annual Media Conference. Per the executive, issues around transparency, brand safety and privacy — what he referred to as the "dark side" of digital media — have, in some cases, gotten worse. The presentation made it clear that P&G is looking for trusted digital partners to spend its advertising dollars with. In this light, Walmart's acquisition of Polymorph could be seen as attempt to win some of P&G's ad budget that may be up for grabs.
Walmart's latest acquisition comes after Walmart brought ad sales in-house for its website to help grow its advertising business. This has helped Walmart provide ad services to CPGs interested in working directly with Walmart's team. By acquiring Polymorph, Walmart will be able to escalate these efforts more rapidly than if it had tried to build cutting-edge ad-tech platform on its own.
"Walmart can't win an arms race with Google or Amazon on engineering, so it makes sense to buy a technology solution," Shamberg said.
While Amazon's ad business continues to siphon off ad revenue from marketers and is even creating its own cottage industries, as evidenced by agencies popping up that cater specifically to helping brands navigate its ecosystem, Walmart is still a viable competitor.
Walmart boasts data on nearly 160 million consumers who visit its to stores and websites on a weekly basis, Stefanie Jay, vice president and general manager of Walmart Media Group, said in a blog post. These are significant numbers, and having this omnichannel data is beneficial to brands who want to track shoppers across the customer lifecycle. To put this in perspective, Amazon has about 100 million Prime members.
