Walmart finally lets advertisers exclude certain search terms

“This offers a higher level of control, allowing the blocking of low-performing or misaligned terms without unintentionally filtering out related high-value traffic,” Walmart Connect said in a blog post. “This added control can help improve budget efficiency, reduce less relevant traffic and support campaign optimization across Sponsored Products campaigns.”

“For Marketplace advertisers, negative keywords can help make limited budgets work harder by reducing spend on irrelevant traffic,” the company continued. “For Walmart suppliers, negative keywords can help support more advanced campaign management across larger brand and product portfolios, including campaigns where multiple products or brands may compete for the same search terms or branded traffic considerations.”

Some advertisers and consultants have been waiting a long time for this change, given that it can exclude irrelevant search queries or searches where customers are already seeking out their exact brand. This is especially relevant within automatic campaigns where Walmart’s search algorithm places ads, rather than manual campaigns where advertisers individually choose which keywords they want to bid on.

Amazon has had a negative keywords feature since 2019, according to advertising trade publication PPC Hero. Even the retail media network for Walmart-owned Sam’s Club has had negative keywords for at least several years, per Sam’s Club Connect’s LinkedIn account.

Chris Sheldon, a consulting leader at marketplace marketing agency Podean — who was an early adopter of Walmart Connect — said that since the retail media network’s inception in late 2019, brands have been buying on those brand-specific terms with Walmart only because they had no choice if they wanted to do automatic campaigns. Walmart Connect tells advertisers on its website that automatic campaigns offer maximum exposure.

“One thing Amazon has never been able to convince brands to do is spend a ton of money on branded terms,” said Chris Sheldon, a consulting leader at marketplace marketing agency Podean, who was also an early adopter of Walmart Connect. “In a world that’s obsessed with incrementality, the least incremental form of advertisement is your branded terms.”

Sheldon said he was surprised by Walmart’s decision, as the company was likely taking in a lot of ad revenue on branded terms — or exact branded search-term/product matches — before this change. But brands and adtech partners have been demanding the feature from the company for years, he added.

“This was not some quiet little request that just kind of gained popularity in the past couple years,” Sheldon said. “It really has been, basically since Covid, since e-comm exploded at Walmart, a begging to get them to release this.”

Alicia Marshia, a strategic partnerships manager at Pacvue who works with Walmart Connect, said this ask has been coming from brands of all shapes and sizes, and that she has also been trying to convince Walmart Connect to add negative-keyword functionality.

“It was really trying to help [Walmart] underscore and prove up the value in being able to truly control your media spend,” Marshia said.

Marshia said for large brands, this will also help them control or better understand how their different products compete with each other for placements on the same search terms.

It can also help brands avoid spending on low-conversion or confusing terms, said Ray Easley, senior director of commerce for Flywheel, a firm that helps CPG brands with retail and media opportunities at Walmart. For example, an eyeglasses brand could use negative keywords to avoid its sponsored listing being shown next to wine glasses.

“What we’re primarily focused on is how this is going to help leverage opportunities to spend budget better,” Easley said. “Not having negative key terms meant that we were spending on key terms that were not giving us return. You could have a big spend pile that goes toward a search term, but no conversion.”

With this change, sales or marketing leaders at major brands can now compete for visibility under search terms they find more desirable. “They’re now going to be contesting, and fighting, and playing for market share where they actually want to be,” Sheldon said.

Sheldon expects brands to see an increase in cost-per-click across the more competitive major category terms. But he warns that they may see their return on ad spend decline as brands stop buying ads for those brand-specific search terms.

“Your account [return on ad spend] is also going to go down,” Sheldon said. “You’ve been boosting it for years and years and years with all this branded spend that artificially inflates your returns, and now that’s going away.”

Sheldon said smart advertisers will be happy with this, but their leadership teams may be confused why their returns are sinking. “Even though it’s better for their business, at the end of the day, they’re going to have to do a lot of explaining to their sales teams and their leadership on why this is happening.”

Marshia said she had also been frequently asked by clients how to avoid spending on their own branded terms. However, she added that brands should dedicate some level of budget toward brand-specific terms to defend their current market position.

Easley said the company plans or has already started to work with brands to identify low-performing search terms, add them as negative keywords and monitor the search behavior over the following weeks.

“With more precision, it gives brands an opportunity to be more confident in the investment that they have with Walmart Connect,” Easley said. “When we didn’t have this granularity with the negative key terms, … we were spending and not getting the return we necessarily wanted.”

The new feature is a sign of retail media networks maturing and that Walmart is listening to advertisers’ asks for more precise targeting, Marshia said. “I think Walmart has seen the light, as many of our other retail media partner networks also have had this feature for some time.” She added that this could also free up brands’ budgets to invest in emerging upper-funnel campaign types like connected TV — a significant focus for Walmart Connect in recent months.

“As brands are becoming more sophisticated, their goal is to move further up the funnel,” Marshia said. “Increasing those dollars or efficiency within sponsored search frees up those dollars for them to test more awareness and consideration tactics.”