Media Giant Walmart's New Descriptor: From Online To Offline

Walmart became a media giant on Tuesday when it officially announced the acquisition of television manufacturer Vizio -- not a surprising move given the company’s insatiable appetite for technology, content and advertising.

The company has always been a trailblazer in high-tech projects. It became one of the first to implement radio frequency identification (RFID) technology in January 2005 to track brands’ products through its supply chain to its store shelves, following several pilots at its Dallas distribution center.

The project was led by Linda Dillman -- CIO at Walmart at the time -- and lasted for years, managing to convince hundreds of suppliers to tag products with the chips that would keep count.

Walmart today said it paid TV maker Vizio $2.3 billion to secure its place in media advertising and create a more formidable rival to Amazon’s booming ad business.



Through the acquisition of Vizio, Walmart adds the ability to offer ads through streaming services on television.

It already supports search and sponsored ads on its website, as well as ads in physical stores. Companies like Skai and Criteo support online sales that extend across the web.

Earnings results also were released Tuesday. The company reported that ad sales rose 33% for the final quarter of 2023 to bring the company's full-year ad-sales total to $3.4 billion -- up 28% year-on-year. In the U.S., for the Walmart Connect business, ad sales rose 22%.

“Vizio gives us the opportunity to reach and serve customers in new ways and connect more dots for those that advertise with us,” Walmart President and CEO Doug McMillon said during a conference call with analysts and investors.

Advertisements and groceries are expected to catapult future earnings to higher levels. SmartCast, Vizio’s Smart TV operating system, has more than 18 million active accounts, giving brands more ways to reach consumers. It would supplement the company’s lower-margin retail business.

Don't underestimate Walmart because it began as a retail store. Replacing the very thin margins in retail grocery sales with higher-margin advertising dollars will offset any spending and boost profits.

Its advertising business last year reached $3.4 billion, although it comprises less than 1% of the company's total sales.

Walmart’s basket of shopper data -- both online and offline -- will also become a lure to advertisers. Its website and stores attract some 160 million visitors a week.

"Walmart has entered Amazon and Best Buy's ecosystem of users through the purchase of Vizio, a strategic move that will not only increase Walmart's inventory supply but also boost ecommerce sales for the company," says David Zapletal, COO at Digital Remedy, a performance media agency.

The acquisition embeds Walmart deeper into consumers' homes, and allows the company to gain deeper insights into media consumption habits and exert an overall influence on its growing commerce sales, Zapletal adds.

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