Integrating CommerceIQ into Walmart Connect provides clients with extra tools for managing retail media campaigns and gaining insights into outcomes beyond return on advertising expenditure. The new products follow in the footsteps of existing digital ad networks, emphasizing automation and self-service capabilities that are less expensive and simpler to adjust than managed campaign services. The CommerceIQ alliance also allows companies to bring their agencies, managed services, and self-service tools to the table.
Connect has taken on a more significant role as Walmart intends to expand its U.S. company into a top-10 advertising network. Other collaborations with similar purposes exist at the big-box retailer, including a demand-side platform (DSP) built with The Trade Desk to assist automate advertising purchasing. Walmart has launched Walmart Luminate, a consumer data-sharing business with Dunnhumby that supports the DSP.
Automated channels accounted for about half of Walmart’s ad revenue in the fourth quarter. Walmart’s worldwide advertising efforts are expected to produce $2.1 billion in 2021, up 30% yearly in the most recent quarter. In Q2 2022, Luminate increased by 75% over the previous quarter.
Walmart has built a powerful advertising company based on massive customer data from its huge brick-and-mortar presence and online retail platforms. According to the firm, 90 percent of U.S. households purchase with Walmart annually, making it the No. 1 grocer and No. 2 e-commerce destination behind Amazon.
Amazon is the most serious competitor in the retail media battle, with tens of billions of dollars in yearly sales vs. Walmart’s $2.1 billion. However, Walmart is up against an increasing number of conventional retail rivals. Grocers like Kroger and Albertsons are increasing their advertising budgets, and Target has its Roundel media network. Pharmacies such as CVS and Walgreens, as well as a handful of department shops such as Nordstrom and Macy’s, are increasingly involved in retail media. Kohl’s made the Kohl’s Media Network public for the first time this week.
Technological sophistication may be required to stand out as the playing field becomes more crowded. CommerceIQ raised a $115 million late-stage fundraising round in the spring, bringing its value beyond $1 billion amid a surge in investment in e-commerce businesses. Every day, over 2,200 companies utilize CommerceIQ’s platform.
Netflix chooses Microsoft as a partner to develop its ad-supported streaming business
A significant move in the streamer’s closely-followed ambitions to provide an ad-supported tier is the announcement by Netflix that it has chosen Microsoft as its worldwide ad tech and sales partner.
Greg Peters, the chief operating and product officer of Netflix, complimented Microsoft’s capacity to satisfy its advertising requirements, provide flexibility in innovation, and provide solid customer privacy measures. The agreement, the executive said, is still in its early stages but eventually seeks to provide consumers more options while giving sponsors access to “better-than-linear TV” premium experiences.
The partnership is a significant success for Microsoft, which is a covert but expanding player in digital advertising. To supplement its current data-driven advertising solutions, LinkedIn and the Bing search engine owner purchased the programmatic business Xandr from AT&T in December. Microsoft earned almost $10 billion from advertising last year.
According to Ross Benes, chief analyst at Insider Intelligence, “Microsoft, the fourth-largest ad vendor in the U.S., presents fewer conflicts of interest for Netflix than some other corporations, and it has good ties with a broad swath of advertisers.”
Benes said, “One of Netflix’s biggest assets is its better user experience.” This relationship “indicates that Netflix’s advertisements won’t create a new standard for the nascent streaming industry, but rather will imitate the conventional ad experience for better or worse,” given the ad experience seen in Microsoft products like Bing and LinkedIn.
After revealing plans for an ad-supported tier in April, Netflix talked with several businesses, including Google and Comcast. The “Stranger Things” distributor is reportedly considering several outside applicants for a position that would supervise its cutting-edge ad operations, according to a story in The Wall Street Journal published earlier this week.
Microsoft’s technological capabilities and infrastructure may enable the business to launch the idea more quickly. According to reports, the streamer informed staff that advertisements might start running as soon as the end of 2022. According to a different Journal story, the change presents Netflix with new challenges, including those related to licensing material from other studios.
The streaming industry has long pushed back against cheaper, ad-supported subscriptions, but Netflix has recently been shaken by sluggish membership growth that compares significantly with prior stratospheric highs. Two waves of layoffs have occurred in recent months due to the downturn.
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