In a move aimed at bolstering Walmart Media Group, Walmart Inc.’s growing advertising business, the retail giant plans to buy advertising startup Polymorph Labs’ technology and assets. Terms of the deal, which is expected to close later this spring, were not disclosed.
Walmart plans to weave Polymorph’s technology, which includes an ad server, self-service interface and server-side ad bidding, into Walmart’s omnichannel ad targeting and measurement platform. The integration aims to make it easier for merchants to manage real-time auctions across multiple ad-pricing models, such as cost per click, cost per impression and cost per conversion.
The company’s founders, Satish Polisetti and Dhawal Mujumdar, along with Polymorph’s team of product developers and engineers, will join Walmart Media Group and Walmart Labs in the retailer’s offices in San Bruno and Sunnyvale, California, and Bangalore, India.
Walmart’s advertising push comes at a time when its chief rival, Amazon.com Inc., has been aggressively scaling up its advertising business. In the fourth quarter, for example, Amazon’s “Other” category, which is largely advertising services, generated $3.39 billion (Amazon doesn’t break out specific financials for advertising). That’s a 94.8% increase from the previous year. To continue that growth, several Amazon executives have made public comments that the retailer is looking for ways to simplify the ad-buying process on its platform.
Walmart has a similar objective, writes Stefanie Jay, vice president and general manager, Walmart Media Group, in a blog post. “Polymorph’s technology platform, which has already proven itself at scale over the past five years, will enable Walmart advertisers to on-board quickly, select audience segments based on shopping behavior (e.g., cat food buyers vs. dog food buyers), automate ad delivery and then measure whether their ads influenced a sale,” she writes. “The company’s ad server is also much faster than the traditional client-side servers, so Walmart shoppers online or via our mobile app will be served advertising that is more relevant and delivered faster.”
Walmart believes it has a unique opportunity to rapidly grow its ad business, given the company’s massive scale. Roughly 90% of Americans shop at Walmart every year, and Walmart has nearly 160 million visitors to its stores and websites every week, the retailer says. “Simply put, we can help brands understand if someone saw their ad on Walmart’s platform or across the internet, and then purchased the product in-store or online,” Jay writes. “No one else can do this at scale like Walmart.”
While Walmart has a ways to go before its advertising offerings match those offered by Amazon, the Polymorph acquisition suggests that it is eyeing a large opportunity, says Jason Roussos, senior vice president of strategy at Adlucent, a digital marketing firm. “We should expect [Walmart] to be a much larger advertising player in the next decade,” he says. “This growth will be possible because Walmart’s e-commerce strategy is attracting a much more diverse shopper than its stores. Also, because of its logistics footprint, it has a sizable advantage in terms of possibilities, especially with features such as in-store pickup and local delivery.”
Walmart Inc. is No. 3 in the Internet Retailer 2018 Top 1000.