Dive Brief:
- Walmart acquired the technology and intellectual property behind Thunder, an ad-tech solution focused on creative automation, a company blog post announced on Thursday. The financial terms of the deal were not disclosed.
- Thunder's ad tech is a key part of a new self-serve display advertising platform that Walmart plans to roll out later this year, the retailer said. Its automation capabilities aim to make launching and adjusting campaigns seamless and more accessible to a wider range of advertisers, including smaller suppliers.
- The acquisition arrives closely on the tails of an overhaul to Walmart's media network. The revamp includes a name change from Walmart Media Group to Walmart Connect and a partnership with The Trade Desk on developing a demand-side platform (DSP).
Dive Insight:
Walmart is continuing an ambitious expansion of its media network as it looks to transform Walmart Connect into a "top ten advertising platform," as the company terms it. Netting smaller advertisers into the fold will be an important part of the retailer's strategy, mirroring a path rivals including Amazon and Facebook have taken in growing into digital advertising titans.
Self-serve advertising platforms are usually a central piece to netting small- and medium-sized businesses. Such offerings give marketers more flexibility in managing their digital marketing efforts, avoiding the steep price tags of custom campaigns. Automation can also remove heavy-lift steps from the process and lessen reliance on third-party agencies when it comes to media and creative execution — another cost consideration.
"Thunder's technology and team will reduce the time between the idea for an ad and the ad going live for suppliers," Janey Whiteside, chief customer officer at Walmart, wrote in the blog post. "Thunder will also increase ad effectiveness over time with creative versioning, testing and optimization — unlocking advertiser-specific insights for higher return on ad spend."
Walmart is gaining most of Thunder's employees as part of the deal, The Wall Street Journal reported, citing a source familiar with the matter. However, it will not nab Thunder's existing contracts with advertisers, the report said, and those relationships will instead be sunset.
Creative automation continues to gain traction as marketers direct more of their investments toward digital channels and attempt to cut back on costs during the pandemic. Pinterest last month introduced a new ad format that lets marketers automate the process of building personalized creative targeted at specific audiences. The researcher Forrester forecasts that 11% of creative and media agency tasks will be automated by 2023, a shift that's been accelerated by the COVID-19 crisis.
With the Thunder acquisition, Walmart's ad-tech suite looks more well-rounded. The company is in the midst of developing a DSP with The Trade Desk, one of the leading players in the ad-tech category, that intends to launch in time for the 2021 holidays. Over the summer, the retailer integrated an omnichannel analytics solution called Performance Dashboards into its media network. Previously, Walmart introduced the Advertising Partners Program, a self-serve portal that enables marketers to more easily purchase search and sponsored product ads.
Walmart has seen success with its fledgling ad business, which operates in a crowded field that now includes Target, Kroger, CVS and Walgreens, along with more digitally oriented competitors. The company claims ad revenue and the overall number of advertisers using its media network doubled in the last fiscal year, though Walmart did not break out specific figures.
Catching up with chief rival Amazon will still prove a steep challenge. Amazon's advertising revenue jumped 64% year-on-year to $7.95 billion in the fourth quarter of 2020, per earnings results released earlier this week. The growth rate of advertising revenue was higher than any other business segment.
