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Walmart acquires start-up in move to become major omnichannel ad player

Walmart is priming its omnichannel advertising capabilities to take on Google, Facebook, and Amazon.

The discount giant is acquiring the technology and assets of Polymorph Labs, a Silicon Valley-based advertising startup. Walmart is anticipating that Polymorph’s technology, which includes a high-speed ad server, a self-serve interface and server-side header bidding, will make advertising easier for its partner brands while delivering more relevant digital ads to consumers.

Walmart is implementing Polymorph’s technology as a complement to its current Walmart Media Group omnichannel ad targeting and measurement business. With Polymorph’s scalable technology platform, Walmart intends to enable 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.

Because the Polymorph ad server is also faster than traditional client-side servers, Walmart says its online and mobile shoppers will be served advertising that is more relevant and delivered faster.

Walmart already promotes itself as having the ability to measure omnichannel advertising effectiveness – such as if a customer views an ad on the Walmart website and then buys it in a Walmart store – at an unparalleled scale. Now the discounter will have significantly enhanced capabilities for targeting, tracking, and measuring ROI of omnichannel ads.

The retailer also intends to integrate the Polymorph digital advertising architecture to provide a platform for future ad innovations, such as real-time auctions across cost per click, cost per impression and cost per conversion ad pricing models.

“Ultimately, the acquisition of Polymorph technology will enable both existing and new advertisers to control their ad spending with us and reach their desired audiences more effectively,” said Stefanie Jay, VP and GM of Walmart Media Group, in a corporate blog post. We’re thrilled to have the talented team at Polymorph Labs join Walmart Media Group to help us do just that.”

While Facebook and Google loom large in the retail digital retail advertising space, Amazon is quickly catching up to them. Walmart’s purchase of Polymorph is clearly aimed at capturing some of that market share before Amazon takes it all.

According to a February 2019 survey from advertising software vendor Nanigans and Advertiser Perceptions, Amazon is rapidly gaining momentum in the digital advertising race. Retail marketers estimate Amazon gets 14% of their digital ad spend, placing it third behind longtime leaders Google (21%) and Facebook/Instagram (19%). Additionally, half of those surveyed said they are planning to spend more with Amazon over the next 12 months, with an average planned increase of 25%.

While some retail marketers are shifting ad dollars from other channels like Google (29%) and Facebook/Instagram (34%), 41% are adding incremental budget to support their increased Amazon spend. Presumably, Walmart is eyeing that potential incremental ad spend growth for itself.

“Amazon offers a major benefit to advertisers, especially CPG and direct-to-consumer [D2C] brands,” said eMarketer forecasting director Monica Peart. “The platform is rich with shoppers’ behavioral data for targeting and provides access to purchase data in real time. This type of access was once only available through the retail partner to share at their discretion. But with Amazon’s suite of sponsored ads, marketers have unprecedented access to the ‘shelves’ where consumers are shopping.”
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