Walmart has acquired Polymorph Labs, an ad tech startup, to compete with the online retail giant, Amazon
Walmart is buying a San Francisco-based ad tech startup Polymorph Labs. This will increase the retail giant’s capacity to fight rival Amazon who is targeting shoppers online. The terms of the acquisition were not revealed.
Walmart has been building its own advertising business unit called the Walmart Media Group, but it did not have the technology teeth to fight Amazon. Polymorph’s technology platform, which includes a high-speed ad server, will join the Walmart Media group and enable advertisers to select audience segments based on shopping behavior, giving it a faster time to market abilities.
“Walmart Media Group allows brands to measure the effectiveness of advertising across the complete shopping journey and reach more customers at scale. Simply put, it can assist brands in knowing if some person saw their advertisements across the web or on our platform, and then bought the product online or in-store. Like Walmart, nobody else can do this at scale,” said Walmart Media Group’s VP and General Manager, Stefanie Jay on the company’s corporate blog.
According to research by eMarketer, Amazon’s total ad revenue in 2017, in the US was $3.3 billion. This was nearly 4% of the entire digital ad spending pie. Amazon has a large advertising business, but Walmart’s own ad business is much smaller. This acquisition is a strong step towards changing that.
Earlier this year, Walmart consolidated advertisement sales for its online sites and stores; it was ready to monetize the shopper data on a much larger scale. With the acquisition of an adtech company, and armed with more customer data, it expects to compete better via online digital ads and targeted using shopper data. This has come at a time when Amazon is aggressively increasing its advertisement revenues with payments from merchants who want a better placement in search advertisements.
What will make Walmart Media Group stand out in advertisement sales from the online retailers, is the facility for its advertisers to leverage a combination of in-store and online shopper data. Polymorph Labs offers the technology that will enable unique combinations of the online and offline store, making ad buying more efficient.
Amazon’s ad business is also growing at a faster pace with the revenue at $3.3 billion in 2017, against the predicted $1.9 billion. As news of Amazon’s efforts to further increased ad revenue hits analysts, the forecast for 2020 stands at $15 billion.
Walmart claims to have 90 percent of US consumers shopping at its stores every year. A total of footfall on websites and stores is as high as 160 million every week. Though the retail giant does not share the number of online customers, estimates from comScore have put the number at more than 100 million a month.
Amazon, despite being an online store, has a market in multiple countries, while Walmart’s consumer base is still majorly in the US. Now that it has planned physical stores are coming up in other countries too, Walmart could well become the next ad sales giant.