Are Amazon and Walmart on a Collision Course For Digital Ad Supremacy?
And could The Trade Desk be a casualty?
I was away last week, so I’m still catching up on some of the bigger ad world news. But here’s something that stood out to me:
Are Amazon and Walmart the new walled gardens? Are they on a collision course?
Here’s my train of thought. Let me know if this makes sense:
Amazon's demand-side platform, once built primarily to service sponsored ads on Amazon, is taking off. Increasingly, they'd like brands to use it for everything- digital ads, TV ads, not just Amazon ads (great reporting here from Digiday)
Meanwhile, Walmart’s ad business continues to soar. It jumped 27% last year, landing at $4 billion. And that’s before the company does anything with its new valuable toy, Vizio.
You may recall that Walmart's ad platform, Walmart Connect, is powered by The Trade Desk
-The Trade Desk shocked everyone in ad tech circles recently with a suddenly bad quarter, sparking CEO Jeff Green to issue a 15-point plan aimed at setting things right
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The Trade Desk is in a bit of a weird spot. It was initially focused on the open web - which feels like it’s turning into garbage overnight, before more recently pivoting to CTV, the curated, CTV-heavy Trade Desk 100, and retail media. In fact, the company recently brought on Albertsons retail media exec Claire Wyatt along with Jill Smith, formerly of Kroger.
TTD clearly wants to become an Uber Retail Media platform, bringing in data from all parties. The thing is, TTD is not a retailer itself, and doesn’t own it’s own shopper data or conversion info like an Amazon does. Or a Walmart could.
So here are a few questions:
As advertising becomes more of a strategic priority for Walmart, does Walmart stick with the Trade Desk, or decide to build its own DSP - not only to serve its own site and app, but Vizio, and the rest of the CTV and web?
Could a Walmart ID, much like Amazon’s reams of personal data - prove far more valuable and compelling to brands than a spliced-together ID product such as UID 2.0 or ramp ID?
Building out an in-house ad tech practice isn’t easy. Does Walmart have both the chops and desire?
Could they turn to another player, like a Google or a Yahoo?
Would either Amazon’s DSP rise, and or a Walmart competitor, raise the ire of regulators? Who knows with this new administration, which seems to have other priorities. All of the big tech CEOs have donated to Trump this year, so maybe ad tech needs to just follow suit. Perhaps TTD could send over some valuable minerals or something
This is purely speculative on my part. Walmart could be more than thrilled with TTD’s tech and service (though one of the reasons cited for TTD’s earnings miss was a slow transition to its newer DSP tech). Yet I wonder if Walmart sees Amazon’s trajectory - from being listed as ‘other’ in earnings reports to $56 billion in 2024 - and decides to seriously ramp things up.
"Walmart's ad business is crushing it, but the interesting development will be how they expand their offering to non-endemics once CPG brand dollars are maxed out,” said Zach Ricchiuti Vice President, Client Solutions at Kepler. “What will the value proposition be to brands that don't sell at Walmart?”
Like Amazon, I wonder if Walmart wants to graduate from making money from advertising in its world, versus taking a piece of the bigger ad pie. While Vizio could help on that front, “I do envision Walmart eventually looking at building more of their own DSP tech, it would beef up their margin and help provide a more cost-competitive offering to non-endemics by simplifying the programmatic supply chain cost."
That could set Amazon and Walmart on a programmatic advertising collision course that few would have bet on a few years ago. And might not be good news for others in ad tech.