With its Vizio acquisition now complete, Walmart’s ad business may start to look more like Amazon’s
Walmart has completed its roughly $2.3 billion purchase of TV maker Vizio, the retailer announced Tuesday. It stands to be a boon to the company’s growing retail media network.
The deal gives Walmart another large channel through which to deliver ads to customers. Vizio is primarily known as a TV hardware maker but says its software, streaming and advertising services now make up all of its gross profit. Vizio’s SmartCast operating system — which includes a free ad-supported streaming service called WatchFree+ that offers more than 300 free channels and 12,000 on-demand titles — reached 19 million active accounts last quarter, according to Vizio financial filings. The company brought in $445 million in revenue last quarter, up 4% from a year ago.
Walmart’s retail media arm, Walmart Connect, offers advertising to brands and third-party marketplace sellers on Walmart’s digital platforms and in stores. The company revealed its plan to buy Vizio earlier this year. Analysts and marketers see the move as akin to how Amazon uses its Prime Video streaming service and Fire TV connected-TV platform to deliver ads. They expect Vizio to give Walmart a considerable step forward, but still not to the scale of Amazon’s video offerings. Prime Video reaches 200 million viewers each month, according to its CEO.
Seth Dallaire, the chief growth officer of Walmart U.S. who previously led global ad sales at Amazon, said in a statement that Vizio has “expertly changed their business over time, like building and quickly scaling a profitable advertising business.” He said pairing it with Walmart Connect “will be impactful and allow us to invest in our business even further on behalf of our customers.” Vizio CEO and founder William Wang will continue to lead Vizio as CEO, reporting to Dallaire, and the companies will operate separately “for the foreseeable future,” according to Walmart.
Andrew Lipsman, an independent analyst and consultant for Media, Ads + Commerce, said that while Walmart and other companies will struggle to match Amazon’s level of scale in retail media, the Vizio offerings give Walmart a service that will be competitive. Streaming ad inventory is scarce, and pairing new content with Walmart’s extensive shopper data will increase its allure for marketers wanting to understand exactly how advertising over streaming platforms can affect retail transactions.
“This buys Walmart Connect access to a good amount of streaming TV inventory, and Walmart is also better positioned than almost any other retailer, with maybe the exception of Amazon, to provide scaled, closed-loop measurement,” Lipsman said. “I think it’s going to lead to a future where advertisers of all kinds, but particularly CPG advertisers, will be investing in what’s ultimately performance TV. I see this as a key step along that process.”
Vizio isn’t the only streaming content with which Walmart has ties. In 2022, the retailer announced it would add a Paramount+ Essential subscription to its Walmart+ membership program, another way it has recently incorporated streaming into its growing flywheel of services. Before that, the company had reportedly tried to launch its own streaming service. It also bought the movie-streaming platform Vudu in 2010 and sold it to Fandango in 2020.
The Vizio deal could be lucrative for Walmart’s marketplace sellers, who often tap into Walmart’s advertising capabilities. “What’s been missing from Walmart is our inability to really go mid- and upper-funnel. They do have some display ads, but it’s a smaller platform,” said Will Haire, co-founder and CEO of BellaVix, a marketing agency for sellers on Amazon and Walmart’s marketplaces. “We’ll now have the ability to get people in their living rooms, and we’ll have the ability to go more broad in order to fill that upper funnel.”
Haire said Walmart Connect, like Amazon, could implement interactive features into the video platform like QR codes or app functionality to give advertisers email addresses. “It’s all going to be tied together, which is going to make me a more effective advertiser and marketer when I’m thinking of my media plan in order to help brands get more sales on these specific platforms.”
The mechanics of how exactly Walmart will tie Vizio’s services into Walmart Connect and what kind of features it will offer through the integration are yet to be seen.
Haire said he still has several questions about how Walmart Connect’s streaming offering will compare with Amazon’s. As of now, it’s unknown what kind of data Walmart will offer or whether it will provide any creative services for smaller sellers who can’t afford to produce video content themselves. Amazon has its own production capabilities, and AI features to assist in creating video advertisements.
“I’m not sure how Walmart’s going to fill that gap,” Haire said.