OpinionAdvertising revolution: Inside Walmart's bid for Vizio
Opinion
Advertising revolution: Inside Walmart's bid for Vizio
Collaborations between leading media entities in the US and ascending giant retailers are evident. Following Disney's affiliation with Kroger and Roku's with Instacart, Walmart, the largest retailer in the US, takes another step forward in continuation of its collaboration with NBC
Reports of a $2 billion deal between the U.S.'s major retailer, Walmart, and Vizio, the smart TV manufacturer, caused a 25% surge in Vizio's stock this week. What piqued special interest in this deal is Walmart's announcement of intentions to deepen its involvement in advertising. At first glance, what's the connection between the two sectors? But remembering that Amazon ranks as the third-largest advertising player in the U.S., surpassing only Google and Meta, sheds light on why Walmart is taking such strides.
If such a deal comes to fruition, it will enable Walmart to understand not only what its customers are buying but also what they are viewing. The ability to integrate abundant high-quality data for retailers, alongside advertising, is a significant asset expected to bring in $60 billion to major retailers in the US this year, a 30% leap from last year. For instance, a company like Procter & Gamble, selling its products in Walmart stores, could advertise more precisely to its customers through Walmart's advanced advertising tools. This is also why Walmart aims to significantly expand its advertising space through the acquisition of Vizio, whose smart TV operating system is already available in about 10% of US households. Advertising has become a central revenue stream for Walmart, to the extent that in one of its financial reports to the stock market, it was revealed that it generates more revenue from advertising than from selling the TVs themselves.
Walmart's intention to acquire Vizio is another step to increase its advertising revenue. Through its subsidiary, Walmart Connect, which brought in $2.7 billion last year, it recently established an intriguing partnership with NBC Universal's streaming service, enabling easy and straightforward product purchases through television.
Already today, it's the fastest-growing sector in the advertising world, and it's clear that the demand for high-quality data in the hands of retailers will only increase following the disappearance of third-party cookie files. In light of this, there seems to be an increase in demand for retailer data to focus and measure advertising accurately, so deals like Disney-Kroger and Walmart-Vizio won't be the last.
The author is the CEO and the founder of ReachRach, a company specializing in CTV.
