• by Wayne Friedman , February 20, 2024

Confirming earlier reports, Walmart will buy Vizio Holding Corp. -- the smart TV manufacturer, with its Smartcast Operating system -- for $2.3 billion.

Walmart says the deal will strengthen and expand advertisers' connections with customers and will result in “greater impact from their advertising spend with Walmart.”

Analysts have focused on expectations of stronger results in “performance marketing” for Walmart clients resulting from this deal -- especially when it comes to sharing brands' first-party data leading to actual sales of products and services.

The deal, says Executive Vice President and Chief Revenue Officer of Walmart U.S. Seth Dallaire in a release, will rapidly boost Walmart's retail media advertising operation. 

“Our media business, Walmart Connect, is helping brands create meaningful connections with the millions of customers who shop with us each week. We believe the combination of these two businesses would be impactful as we redefine the intersection of retail and entertainment,” Dallaire says.

This also means stronger competition for existing streaming distributors in the connected TV space. 

“We believe the combination creates an incremental competitive challenge for Roku which is currently an industry leader in CTV operating system penetration (with around 80mm global active accounts),” says Michael Morris, media analyst for Guggenheim Securities.

He adds: “Walmart is a primary sales partner of Roku-powered TV units, which may be de-emphasized at point of sale. In addition, Roku is currently the operating system for Walmart house [TV set] brand, Onn, which we assume would no longer be the case following this combination.”

Morris also believes the deal will have an impact for advertiser demand-side advertising platform (DSP) The Trade Desk.

“From a positive perspective, TTD has an existing relationship with Walmart and a strong and growing amount of CTV inventory within the Walmart ecosystem would be incrementally valuable within the partnership,” he says. 

But Morris says there is a cost with buying ad inventory via Trade Desk, as opposed to Walmart’s now owned Vizio’s smart TV ad system. Brands can lower their cost now by buying directly from Walmart.