Retailers Are The Next Ad Agency
Updated: Mar 3, 2021
Retail brands are entering the ad agency sector. With an abundance of data that has come from ecommerce and loyalty programs consumer giants like Walmart and Kroger Co. can now enter the advertising realm. Walmart has created Walmart Media Group where is will aim to "become a top 10 player in the U.S. ad business within five years" according to Adage.com.
In order to become a top 10 ad agency and push past the likes of Verizon Media, Discovery and Spotify, Walmart Media Group will need to clear $10 Billion worth of ad revenue. This is definitely conceivable in my belief. Walmart has a particular clientele that appeals to many types of businesses. This clientele lives in rural/suburban America particularly in the middle part of the country. These people live in homes and condos. They also probably use Facebook and other social medias, but have a rather large distrust for them and other ad agency types. They may believe in the Walmart Brand and come to trust their sponsorships.
In terms of numbers according to Adage's Jeff Neff Walmart grew it's ecommerce business by 79% last year. On top of their in store locations that puts a total of 170,000 digital screen and 4,500 store locations available for advertising. That's more than 150 Million customers weekly. In terms of focused advertising this can lead to a huge increase in end of funnel spending. If you can skip the association phase of advertising and directly sell say, restoration services to a person who buys mold removal cleaning products or selling gym memberships to a buyer who changed their buying habits to more vegetables and diet foods.
The implications of Walmart and other retail brands entering the ad market gives companies the access to actual buying habits of the majority of suburban and rural America. Companies should utilize this new ad agency to get ahead of the market.