How Vizio Expands Walmart’s Advertising Empire 

Why did Walmart buy a TV brand? It’s not about TVs. It’s about advertising. On February 20, the world’s largest retailer announced the acquisition of Vizio. Vizio is an American consumer electronics brand that produces smart TVs and Soundbar speaker systems for TVs. Its smart TVs connect to the internet through Vizio’s SmartCast Operating System. This online-enabled viewing experience is commonly known in the industry as connected TV, or CTV. And CTV is a big growth opportunity for Walmart’s advertising business, Walmart Connect. 

The Growth of Walmart Connect 

To understand why Vizio matters to Walmart, you need to know something about Walmart’s retail media business, Walmart Connect. Walmart Connect is an advertising platform that seeks to benefit advertisers by providing access to Walmart’s large customer base of shoppers – and aspires to enhance the overall shopping experience for Walmart customers through targeted and engaging advertising initiatives. Walmart Connect is among the hundreds of retail media networks sprouting up around the world, which range from Amazon Ads (the powerhouse based on sheer size) to Target Roundel.  

Retail media networks represent a major advertising opportunity. Overall, retail media is the fastest-growing ad channel. Why? One big reason: first-party data. Retail media networks such as Walmart Connect give advertisers a powerful way to sell targeted ads based on all the data that a retail media network’s parent collects about their own shoppers. In the case of Walmart Connect, the network can sell ads based on what Walmart knows about the buying habits of its customers across the company’s stores and online. These ads can appear to shoppers while they’re online or shopping in stores. 

The access to first-party data is especially appealing at a time when third-party cookies are going away. According to Walmart, advertisers on average achieve a 30 percent improvement in return on digital ad spend via Walmart Connect. 

Walmart Connect is quickly emerging as a force to be reckoned with. The company’s ad business grew by 33 percent globally and 22 percent in the United States during Walmart’s most recent quarter. One reason Walmart Connect is growing: Walmart keeps evolving the ad business, and this is where Vizio comes into play. I mentioned earlier that Vizio offers CTV viewing experiences. CTV is hugely important to retail media networks such as Walmart Connect. According to information from MNTN Research (citing eMarketer), video advertisements on CTV rank as the third most preferred advertising format among U.S. advertisers in the consumer goods sector who purchase ads through retail media networks. By integrating retail media networks with CTV platforms, companies can display commercials on these platforms, using the first-party consumer data offered by retail media networks. 

The Appeal of CTV and Vizio 

CTV has become intensely competitive for retail media networks. Amazon Ads offers advertisers the ability to run CTV ads on Amazon Prime Video and Freevee, and Target Roundel has partnered with the Trade Desk to reach Target shoppers on CTV, to cite but two examples. Walmart Connect is no stranger to CTV. Through a collaboration with Roku, Walmart Connect grants advertisers the opportunity to tap into Roku’s premium inventory. This alliance enables advertisers to target Walmart customers on Roku devices with specific advertisements for Walmart’s products and services. 

Vizio takes things to another level by opening a CTV delivery system for Walmart Connect. More than 70 percent of Vizio’s TVs are already sold at Walmart. Reportedly, the acquisition will give Walmart control over more than 20 percent of the U.S. TV market and further accelerate Walmart Connect’s U.S. growth. Vizio already offers advertising services through its smart TVs. As Walmart reported, Vizio’s SmartCast operating system enables audiences to stream content for free by watching ads. SmartCast has accumulated more than 18 million active accounts growing approximately 400 percent since 2018. Vizio also offers its own free streaming service (WatchFree+) with hundreds of live channels and on-demand content covering news, sports, movies, and more. 

All of this has enabled Vizio to create an advertising business that accounts for most of the company’s growth in the last five years, according to Walmart. Vizio’s platform has over 500 direct advertiser relationships, including many of the Fortune 500.  

All about the Data 

Like Walmart, Vizio collects data about its audience watching content on Vizio smart TVs. Vizio has information about what people watch, what apps they use, and even general things about them (with the viewer’s permission, of course). This lets advertisers show ads to the right people, not just everyone. Vizio can place ads in different spots on the TV screen, like when you’re browsing for something to watch or even within streaming shows through their ad-supported service, WatchFree+. Vizio helps advertisers see if their ads are really working. Did people visit their website or buy something because of the ad? They can provide information to help advertisers know this. 

In other words, Vizio’s smart TVs (specifically, Vizio’s SmartCast operating system) puts Walmart Connect directly in the homes of millions of viewers. This gives advertisers a chance to reach people in a prime setting for making purchasing decisions. Walmart can now reach customers and influence their choices even when they’re not shopping in a physical store or on Walmart’s website. Crucially, Vizio improves Walmart’s ability to collect data about audiences in three ways: 

• Valuable viewing data: As I noted, Vizio TVs collect data on what people watch, including streaming services, apps, and traditional channels. This helps create richer audience profiles for advertisers. 
• Better ad targeting: Walmart Connect can use this data to tailor ads to specific groups. For example, showing an ad for outdoor gear to someone who regularly watches adventure shows. 
• Closed-loop measurement: With a direct connection between TVs and shoppers, Walmart Connect can offer better tracking on whether TV ads lead to sales in their stores or online. 

The Experience Matters 

But it’s not just the audience data that matters. It’s the experience, too. Walmart Connect can experiment with innovative ad formats that go beyond traditional commercials, like interactive ads or shoppable content within streaming shows. Let’s say a viewer is watching a popular home renovation show on a streaming service through their Vizio smart TV. During a commercial break, a short ad appears featuring stylish furniture for a patio makeover. This ad is specifically targeted to the viewer based on their interest in home improvement shows. A banner appears on-screen with the prompt, “Like this look? Tap for more details.” The viewer can use their remote to interact with this prompt. Tapping the banner transforms the ad into a mini catalog featuring the patio furniture pieces seen earlier, along with related items. The viewer can browse the items, read descriptions, and add their favorites directly to their Walmart shopping cart with a few clicks. And Walmart Connect can track the ad’s effectiveness from initial interest to actual purchase. 

And what’s more? The experience I just described could direct viewers to Walmart’s own website or promote a deal valid at the nearest Walmart.  

Walmart had a competitive reason to do this deal, too. Amazon has a strong advantage already by offering advertising that targets viewers of Amazon Prime content, including the highly lucrative NFL programming. Walmart now has an answer. 

What Advertisers Should Do 

My advice to advertisers: 

• Consider CTV advertising. More and more people are ditching cable and moving towards streaming via connected TVs. Advertisers need to meet consumers where they’re watching. 
• Consider retail media networks. Your choice of a retail media network depends on many factors including, of course, your target audience. For instance, the Macy’s retail media network focuses on fashion-conscious shoppers. Dollar Tree’s network is for shoppers seeking lower-cost products. And as I noted, there are hundreds more networks with their own distinct audiences. 
• Go beyond traditional spots. Think interactive ads, shoppable content, sponsored integrations within shows . . . be open to experiment with what Vizio and Walmart Connect now offer. But it’s more than Walmart and Vizio – be open to how advertising is becoming more interactive and connecting the entire purchase funnel online. 
• Work with a partner who knows the terrain. At IDX, we understand how to build campaigns that connect your business with audiences that matter including on retail media networks. 

Contact Us

Want to learn how IDX can help you? Visit our website and check out our marketing solutions.