Walmart integrates CommerceIQ to fortify its retail media advertising platform

Dive Brief:

Walmart partnered with CommerceIQ, a provider of e-commerce management solutions, to bring new automated capabilities to its U.S. advertising platform, per a news release.
CommerceIQ is now integrated into the APIs of Walmart Connect, offering customers a range of features. Those include tailored optimization tools; strategy builders that drive actions based on desired campaign results; and self-service reporting.
Access to these perks is intended to increase sales growth and brand share-of-voice. CommerceIQ claims to produce an 18% incremental revenue lift in representative results. Walmart continues to grow its Connect unit amid a crowded retail media landscape.

Dive Insight:

Walmart Connect’s integration of CommerceIQ gives customers more tools for managing their retail media campaigns and gleaning insights into results beyond return on advertising spend. The new offerings align with how other digital ad networks have scaled, with a focus on automation and self-service capabilities that tend to be cheaper and easier to modulate than managed campaign services. The CommerceIQ partnership also allows for flexibility: brands can bring their own agencies, managed services and self-service software to the table.

Automation has played a more substantial role for Connect as Walmart plans to grow the U.S. business into a top-10 advertising network. The big-box store has other partnerships aligned around similar goals, including a demand-side platform (DSP) developed with The Trade Desk that helps automate media buying. Walmart recently added a customer data-sharing operation with Dunnhumby called Walmart Luminate that supports the DSP.

Roughly half of Walmart’s ad sales in the fourth quarter came from automated channels. Walmart’s global advertising operations generated $2.1 billion in 2021 and grew 30% year-on-year in the most recent quarter. Luminate saw 75% growth over the prior period in Q2 2022.

Walmart has been able to build a formidable ads business based on troves of shopper data derived from its extensive brick-and-mortar footprint and online retail properties. The company estimates 90% of U.S. households shop with Walmart every year, which would make it the No.1 grocer and No. 2 e-commerce destination behind Amazon.

Amazon remains the most formidable rival in the retail media race, generating tens of billions in revenue annually versus Walmart’s $2.1 billion. But Walmart is also contending with an expanding crop of competitors from the traditional retail realm. Grocers like Kroger and Albertsons are also ramping up their advertising bets, while Target has its Roundel media network. Pharmacies like CVS and Walgreens are now in the retail media game, as are a number of department stores including Nordstrom and Macy’s. Kohl’s this week revealed the Kohl’s Media Network to the public for the first time.

As the playing field widens, greater tech sophistication could be needed to stand out. CommerceIQ in the spring closed a $115 million late-stage funding round, pushing its valuation past $1 billion amid an influx of investment into e-commerce startups. More than 2,200 brands use CommerceIQ’s platform daily.