How Vizio could transform Walmart’s ad business
Walmart reached a deal on Tuesday to acquire smart TV manufacturer Vizio for $2.3 billion — a move that immediately accelerates its burgeoning advertising business.
Through the deal, Walmart will be able to push its products through Vizio’s smart TV interface, SmartCast, which currently has more than 18 million active monthly accounts, according to a press release about the acquisition.
Vizio entered the advertising business in 2019 with the launch of Vizio Ads, selling inventory across the SmartCast operating system and other streaming apps. Prior to that it acquired TV viewership data and measurement platform Inscape in 2015, which merged into Vizio Ads in 2020. Vizio claims to have more than 500 direct advertiser relationships.
Vizio adds to Walmart’s growing retail media business, Walmart Connect, which propelled the retail giant’s advertising revenues to $2.7 billion in 2023 and is quickly becoming an important, high-margin portion of the retailer’s revenue mix.
According to industry experts, the acquisition puts Walmart more squarely in competition with Amazon, which launched ads on its Prime Video streaming service in January. In addition to entering the lucrative CTV business, Walmart now has more access to customer data to improve its ad products.
The tie-up also creates more opportunities for connected shopping and entertainment experiences on Vizio devices.
We asked commerce executives and analysts: How might the Vizio deal transform Walmart’s advertising capabilities? What’s in it for both parties?
Here are their responses.
Mike Froggatt, senior director analyst, Gartner
This acquisition follows the trend of leveraging purchase and shopper data across more media channels, with a focus on streaming TV.
It gives Walmart Connect advertisers, including their retail suppliers and marketplace sellers, direct access to Vizio’s ad-supported channels and home screens. It helps Walmart’s advertiser clients purchase ads up and down the funnel — from the bottom with ads placed directly on Walmart.com and its apps, to the top with streaming TV. The deal also significantly expands the potential pool of advertisers spending money with Vizio while closing the loop on Walmart’s vast in-store and online purchase data.
Vizio’s measurement capabilities are also interesting. Combining live automated content recognition data with Walmart’s access to the streaming ecosystem could give Walmart, as an advertiser, significant insight — a truth-set for programmatically traded streaming TV media. Depending on how it is packaged, I could see that being a big selling point for Walmart Connect, enabling it to go after TV advertisers. Amazon Ads has deployed this tactic to some success. It’s an area where Walmart Connect is investing in both tech and talent.
In addition, Walmart’s advertisers will be happy for the expanded audience, conversion and engagement data — a priority for many as brands struggle to update cookie-dependent attribution and measurement solutions.
Jeremy Goldman, senior director, marketing, commerce and tech briefings, Insider Intelligence
The Vizio acquisition could significantly transform Walmart’s advertising capabilities by providing it with direct access to the connected TV (CTV) market, enabling it to deliver targeted advertising directly to consumers’ living rooms through Vizio TVs. This move allows Walmart to offer advertisers unparalleled targeting capabilities by leveraging its vast consumer data alongside Vizio’s technology, creating a more personalized and engaging viewer experience.
For Walmart, the deal offers an opportunity to enhance its competitive edge against Amazon and other tech giants in the digital advertising space. It could also potentially boost ad revenues by attracting a larger share of advertising spend through more innovative and integrated solutions. Walmart could also promote Paramount+, which is bundled with Walmart+, more heavily on Vizio’s home screens.
For Vizio, partnering with Walmart opens up new avenues for growth and expansion. Walmart’s vast retail presence and consumer data can help Vizio’s SmartCast platform become even more attractive to advertisers, potentially increasing ad inventory value. Additionally, being associated with a retail powerhouse like Walmart could bring Vizio’s products into the spotlight, increasing sales and brand recognition.
This partnership is poised to create a more integrated shopping and entertainment experience for consumers, leveraging Walmart’s retail and data prowess with Vizio’s technology and presence in the CTV market. It marks a strategic leap towards merging retail, entertainment and technology in ways that could redefine the advertising landscape, benefiting both Walmart and Vizio.
Jennifer Kohl, chief media officer, VML
There is a huge benefit for Walmart, which gains access to even more data and the obvious benefit of extending beyond advertising online and in store. Now Walmart can enter the very lucrative video/streaming sphere of ad dollars by offering ads at scale via Vizio devices. It would not shock me if Walmart created entertainment content as well.
For Vizio, the benefit is selling more units. Walmart will be incentivized to sell Vizio products — and that will be great for Vizio. They are now at the front of the line…or the aisle.
Nikhil Lai, senior analyst, Forrester
This deal will transform Walmart’s advertising capabilities by bringing in upper-funnel inventory that unlocks brand budgets beyond cannibalized co-op funds. It also brings TV viewership data which, when applied to Walmart’s wealth of purchase data, results in higher yielding, more accountable TV advertising.
Over time, this deal helps Walmart’s retail media networks — Walmart Connect and Sam’s Club Member Access Platform — become a scaled alternative to Amazon and intensifies the arms race to normalize shoppable TV. Shoppers can expect ads to subsidize lower TV prices.
Christine Gambino, chief product officer, Flywheel
Vizio has a robust advertising business with 18 million Smartcast accounts and over 5 billion streaming hours. This acquisition offers a great opportunity for greater targeted reach for Walmart. It should allow Walmart to layer its insights on the Vizio ad platform — creating more personalized ads. Coupled with clean room technology, Walmart can claim advertisers will be able to create highly targeted audiences at scale and measure performance of their advertising against sales at Walmart.
