Walmart buys ad Tech to chase small businesses

Walmart buys ad Tech to chase small businesses

News Highlights: Walmart buys ad Tech to chase small businesses

Walmart Inc.

will acquire technology from Thunder Industries, a company that uses automation to create digital ads as it continues to invest in its advertising business and seeks a larger share of small business marketing budget.

The company declined to disclose the terms of the deal. Walmart will purchase the technology and assets from PaperG Inc., which does business as Thunder Industries, and will acquire most of the company’s employees, according to a person familiar with the case. It’s not buying Thunder’s existing customer contracts that will be terminated, the person said.

Walmart will instead use Thunder’s technology to launch a self-serve tool that will help advertisers create and buy numerous versions of display ads targeting different types of consumers on its properties.

A skincare company can use the tool to create versions of an ad featuring models of different ages, for example, and then use the technology to determine which one performs best. The new self-service display advertising tool will be launched later this year, the company said.

“As we continue to expand our media business, we need to find ways that we can easily serve all suppliers – whether they are companies that have been Walmart deliveries for years or brand new suppliers in the market,” said

Janey Whiteside,

chief customer officer at Walmart, in a statement. “The new self-service display platform and the integration of Thunder’s technology do just that,” she said.

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Walmart and other major retailers, including

Kroger Co.

and Target Corp. have developed digital ad offers to generate new revenue by using their customer data to help marketers target customers online and in stores.

They hunt for powerful competitors by far.

Amazon.com Inc.,

the third largest digital ad retailer

From Alphabet Inc.

Google and

Facebook Inc.,

generated approximately $ 8 billion in revenue in the fourth quarter of 2020 in the segment that includes mostly advertising revenue.

Walmart does not disclose the size of its ad business, but has previously said it has doubled ad revenue in the past year.

Walmart said last month it is overhauling its ad salesgroup, renaming it from Walmart Media Group to Walmart Connect, and developing new ad tools to attract more advertisers and ad revenue. Walmart has partnered with an ad technology company

Trade Desk Inc.,

for example, to create a new ad-buying platform that allows brands to use Walmart data to send targeted digital ads to consumers across the web, not just Walmart’s own properties, such as the website and app.

The purchase of Thunder builds on those efforts by helping Walmart focus more on small businesses, an important area of ​​growth as more consumers shop online.

Google and Facebook derive a large portion of their advertising revenue from small businesses. Many such companies lack the resources of larger marketers and are drawn to self-service tools and other technology that make it easier to create ads and target them precisely to as many relevant groups of customers as possible.

Time is a big constraint for small businesses looking to increase their revenue through marketing and advertising

Brian Wieser,

global president of business intelligence for the ad-purchasing giant GroupM, owned by WPP PLC. “Wherever you can basically meet your needs from a marketing perspective with a single port of call, maybe a second, that’s where you spend your time,” he said.

But it won’t be easy for retailers to compete against more established digital ad rivals, said Mr. Wieser.

“There are many challenges to overcome from a cultural perspective – retailers are typically not very well connected with the media industry and don’t necessarily understand what marketers want,” he said.

Walmart, Amazon and other retailers have the advantage of instant information about what consumers are buying, data that will become more valuable for ad targeting when Google and Apple make promised policy changes that will undermine established tracking and measurement tools, industry experts said.

“As any type of cross-platform or cross-media tracking becomes more difficult, it becomes very difficult to say that these revenues are the result of these ads,” said

Nicole Perrin,

chief analyst at research firm eMarketer. “If you have some kind of closed system, which is what Amazon does and Walmart does, then that closed-loop attribution becomes a big part of the attraction,” she said.

Write to Sahil Patel at sahil.patel@wsj.com and Alexandra Bruell at alexandra.bruell@wsj.com

Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Via: www.wsj.com

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