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Even With TikTok Investment In Limbo, Walmart Pushes With Its Advertising Business

Even With TikTok Investment In Limbo, Walmart Pushes With Its Advertising Business
Following years of stunted progress, retailing giant Walmart Inc is now aggressively expanding its advertising business even while its proposal for a deal to purchase a stake in the popular Chinese video sharing app TikTok still remains uncertain.
Better utilization of its treasure trove of shopper data is being made by the largest retailer of the world by linking the data with promotions on its website and app trough ads inside its network of 4,700 stores in the United States, according to a report published by Reuters based on interviews of six advertising agencies and Walmart ad tech partners, three major brands and bankers and ex-employees.
After Walmart cut ties with its external advertising partner last year while also taking the business in-house – and naming it Walmart Media Group, the company had started to refocus on its advertisement business. The company aimed to benefit from its ability to bridge online and offline data for its advertisers. The company also planned to develop an ad platform that could rival, said the reports quoting the sources.
The report also claimed that Walmart was benefitting from that strategy and an earning of almost $1 billion in advertising sale this year is expected by the company – which would be more than double of what this advertising unit had managed to generate last year.
No comments on the sales estimate were made by Walmart. The company however explained the approach is had taken to grow its ad business. "One thing we do at Walmart Media Group is make sure that the advertising we're placing is additive to the customer experience, that we're not just throwing ads on anything anywhere, that we're really strategic," Walmart spokeswoman Molly Blakeman said.
How the company can now continue to grow its ad business into one that will matter to investors of a company that earned about $524 billion in total revenue in fiscal year 2020 is the biggest challenge for the company, said reports.
"It's going well, and they want it to go very, very well," said the Reuters report quoting a source. "There have been very material gains but it doesn't yet put a dent in Amazon's lead or Walmart's top or bottom line."
It was expected by the company that its ad business strategy would get a huge boost from the deal for TikTok - which has a reach of more than 100 million US users a month. The deal would also help Walmart to engage with younger audiences that may not be regular shoppers of Walmart.
However political uncertainty has mired the negotiations to invest in the Chinese-owned TikTok.
That has however evidently not deterred Walmart from pushing ahead with its strategy, according to members of the advertising agencies and brands interviewed. However the company has over the years has struggled to create new lines of business and has not managed to make a profit from its e-commerce business. In terms of acquiring technology, Walmart also has a long way to go, including technology for tracking how ads translated into sales which is a critical selling point for brands, said advertisers and ad agencies.

Christopher J. Mitchell

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