- Walmart announced this week that it has acquired Vizio and its SmartCast operating system for $2.3 billion.
- The partnership expands Walmart’s advertising reach as it competes with Amazon for the most attention to its products.
- Although Walmart’s advertising business is still part of Amazon, it leads in daily grocery sales.
Walmart last week offered Vizio and its SmartCast operating system 2.3 billion yen as part of an expansion of its advertising reach as its battle with Amazon continues to get the most attention to its products through ads that appear on streaming content. announced that it would be acquired for US dollars.
The Vizio acquisition coincides with Walmart’s aggressive moves to strengthen its advertising business, which the company said in its fourth quarter earnings report grew about 28% from last year to $3.4 billion. Reporting.
“Walmart entered the Amazon and Best Buy user ecosystem through its acquisition of Vizio, a strategic move that not only increases Walmart’s inventory supply but also boosts the company’s e-commerce sales,” Forbes said. Reported. Marketing company Digital Remedy said the following about the partnership with Vizio.
Representatives for Walmart and Amazon did not respond to requests for comment from Business Insider.
How Walmart Competes – On TV
Vizio makes smart TVs and sound bars, and its SmartCast system gives users access to third-party streaming apps like Disney+ and Hulu, similar to a software version of Amazon’s FireStick. Ads are displayed through the operating system and customer insights can be gathered through automatic content recognition (ACR) systems. The ACR system records the type of content you view so that we can better deliver targeted advertisements to you.
“This ACR data gives Walmart Connect very powerful targeting capabilities that Amazon doesn’t have at Vizio’s scale to compete with other companies,” said Kenneth Suh, chief strategy officer at ad tech platform Nexxen. he said. ad week.
This acquisition will allow Walmart to embed itself directly into consumers’ homes through advertising, reaching new customers and gaining deeper insight into their media consumption habits, which in turn will increase commerce sales. It should also grow.
Walmart currently sells advertising space to suppliers on its internal sites and apps and runs advertising campaigns through promotional posts on external social media sites. The company also buys streaming and TV ads, but the Vizio acquisition will lower the cost of those campaigns by presenting ads through a new Walmart-owned platform rather than buying space from a third party. This will be significantly reduced.
“With Walmart’s consumer reach, Vizio’s advertising business could eventually grow to rival those of Samsung and Roku. If that happens, although it’s not clear whether it will happen, And it could eventually become one of the top five CTV ad sellers in the world.” AdWeek reported that Insider Intelligence analyst Ross Venez said: Said.
While Walmart’s advertising business remains a small part of Amazon’s, with Amazon reporting that its advertising services grew 27% in the fourth quarter and total revenue of $46 billion in 2023, the brick-and-mortar chain We continue to lead the industry every day. Today’s grocery sales. It also reported higher revenues than the online retail giant.
For both companies, Walmart reported $173.4 billion in sales for the fourth quarter, which includes the year-end sales season, while Amazon reported $169.96 billion.
“Book and TV sales are great and very useful,” Doug Herrington, Amazon’s Worldwide Stores CEO, told Fortune magazine, pointing to Amazon’s strengths in large or irregular purchases and using them daily. compared to Walmart’s superiority in grocery sales. How many times a week do you buy books or television, and how many times do you buy packaged goods, toilet paper, or food?”
The Vizio acquisition still requires regulatory approval before completion, but it positions Walmart to take advantage of the retailer’s trends. targeted advertising You can attract potential customers who are browsing other websites, increasing the revenue gap with competing retailers.
Vizio’s existing platform, which has 18 million active user accounts, will allow Walmart to run its own targeted ads as well as sell ads from suppliers, according to a Walmart press release announcing the deal. This will put you in front of millions of potential viewers. Movies and TV shows on new platforms.
In January, Amazon announced plans to charge Prime members $2.99 a month on top of their base subscription fee to keep their streaming content ad-free.
“There’s a lot to be excited about with this acquisition,” Seth Dallaire, executive vice president and chief revenue officer of Walmart US, said in a press release about the Vizio deal. “He believes the combination of these two businesses will have a major impact in redefining the intersection of retail and entertainment.”