In the high-stakes arena of retail media networks (RMNs), the hierarchy has long been established: Amazon leads, Walmart follows, and the rest of the industry competes for the remaining scraps of marketing budgets. However, as the retail media landscape matures and brands demand more granular proof of performance, Walmart Connect is making an aggressive play to rewrite the rules of engagement.
By reaching out directly to brand clients—often bypassing the agencies that traditionally manage these relationships—Walmart is positioning itself not merely as an advertising platform, but as a measurement authority. As the industry approaches the critical fourth quarter, this strategy marks a pivotal shift in how retailers compete for the billions of dollars flowing into the ecosystem.
The Strategic Pivot: Direct Outreach and the Measurement Mandate
Ahead of the 2024 holiday shopping season, Walmart’s sales team has begun a concerted effort to approach brand clients directly, offering proprietary on-site brand lift studies. This move is significant, as it signals a desire to establish a closer, more transparent relationship with the advertisers who control the purse strings.
The primary objective of these studies is to solve one of the most vexing dilemmas in the retail media industry: the "incrementality" problem. Advertisers are increasingly skeptical of metrics that attribute sales to an ad campaign when those sales might have occurred organically. They want to know if Walmart Connect actually drove the purchase or if it simply took credit for a transaction that was inevitable.
According to several agency executives, the outreach has been widespread. While many have chosen to keep their client lists confidential, the move has sent ripples through the agency world, prompting a debate about the role of the middleman in an increasingly data-centric media environment.
Chronology of an Evolving Landscape
The current tension follows a period of rapid, somewhat chaotic growth for retail media. For years, the lack of standardization across platforms, combined with the "walled-garden" nature of retail data, forced marketers to rely on a hodge-podge of fragmented approaches to track their investments.
- Early 2024: Walmart reports sustained momentum, with its global advertising business surging 38% in the second quarter.
- Late Summer 2024: As brands finalize their Q4 strategies and begin planning for 2025 and beyond, Walmart identifies a gap in the market: the need for sophisticated, in-house measurement capabilities.
- September/October 2024: Walmart Connect accelerates its direct-to-brand outreach, positioning its brand lift studies as a key differentiator for the holiday season.
This timing is no coincidence. In Q4, the pressure on CMOs and CFOs to justify every dollar of ad spend reaches its zenith. By providing internal, proprietary data, Walmart is attempting to control the narrative at the exact moment when advertisers are most sensitive to ROI concerns.
Supporting Data: The Scale of the Retail Media Gold Rush
The urgency behind Walmart’s move is underscored by the sheer scale of the industry. According to data from eMarketer, advertisers are expected to pour approximately $69.33 billion into retail media networks by the end of this year. As these budgets balloon, the "black box" nature of RMNs is becoming increasingly untenable for brands.
Walmart’s 38% growth in its global ad business confirms that it is one of the fastest-growing players in the space. However, growth brings scrutiny. To capture a larger share of the market, Walmart must prove that it is not just a "lower-funnel conversion engine"—a place where customers go to buy items they already wanted—but a "full-funnel partner" capable of driving awareness and consideration.
For advertisers, the trade-off is clear. While these studies offer deep insights into performance, they are often gated by minimum spend requirements. Anthony Costanzo, chief analytics officer at Mile Marker, notes that while these tests were once reserved for a handful of massive, high-spending accounts, the conversation is now trickling down to mid-sized accounts as well.
Official Perspectives and Agency Concerns
The industry response to Walmart’s direct-to-brand approach is nuanced. Agencies, which traditionally act as the gatekeepers and strategists for their clients, are navigating a complex reality.
The Agency View: "Grading Their Own Homework"
For many agencies, the primary concern remains the lack of independence in these studies. "We’re still not able to execute the kinds of incrementality tests we’d like to, that we could do in a non-walled garden," says Costanzo. "We’re essentially seeing retailers grading their own homework."
Lacie Edgeman, co-owner and managing director at the ad agency PrograMetrix, highlights the operational friction these studies can create. "Q4 is when advertisers are least willing to fund spend they cannot defend," Edgeman noted. She points out that these studies, while valuable, can be both costly and time-consuming. In some cases, it can take up to nine weeks after a campaign concludes for the final reporting to materialize—a timeline that often conflicts with the agile decision-making required during the holiday crunch.
The Brand Perspective: A Necessary Evil?
Despite these frustrations, some agencies acknowledge the utility of the data. A spokesperson for Stella Rising, a digital marketing agency, noted that when these studies are executed well, they represent a win for both the retailer and the brand. The granular insights into customer behavior are, for many, the only way to justify maintaining or increasing spend on the Walmart platform.
Implications: A New Era of Competition
The move by Walmart Connect has profound implications for the future of retail media, both as a business model and as a competitive industry.
1. Challenging the Amazon Hegemony
Amazon has long reigned supreme because of its massive audience and mature advertising infrastructure. By focusing on incrementality, Walmart is effectively creating an "attack angle." If Walmart can successfully convince CMOs that its ads provide a superior return on investment—backed by rigorous, proprietary measurement—it can begin to siphon off ad dollars that were previously allocated to Amazon by default.
2. The Future of Agency-Retailer Relations
The fact that Walmart is bypassing agencies suggests that retailers are increasingly viewing the agency model as an unnecessary layer in the data-sharing process. Retailers want a direct line to the brand’s strategy team to ensure their platform is prioritized in budget allocations. This forces agencies to evolve: they can no longer simply be "media buyers"; they must become expert consultants who can interpret the complex, siloed data provided by the retailers themselves.
3. The Push for Standardization
While Walmart’s move is currently a competitive differentiator, it also highlights the desperate need for industry-wide standards. As Costanzo suggests, the fact that Walmart is moving in this direction will likely force other retailers to follow suit. The end goal for the industry, though still distant, is a cross-retailer measurement standard that would allow brands to compare performance across Amazon, Walmart, Target, and others on an apples-to-apples basis.
4. ROI as the Ultimate Arbiter
As the economic environment remains uncertain, the "defensibility" of ad spend will continue to be the primary driver of strategy. Advertisers are no longer satisfied with "vanity metrics" like clicks and impressions. They require proof of incremental sales. Walmart’s willingness to provide these lift studies, even with the caveats of it being a "walled-garden" solution, signals that the company is willing to play a long game, sacrificing short-term friction for long-term loyalty from the world’s largest brands.
Conclusion: The Path Ahead
Walmart Connect is currently at a crossroads. By taking a direct approach to measurement, it is attempting to elevate its status from a transactional platform to a strategic partner. While the agency community remains wary of the lack of independent oversight and the operational burdens of these studies, the sheer demand for incrementality data makes Walmart’s offer difficult to refuse.
As we head into the 2024 holiday season, the success of this strategy will be judged by the data. If Walmart can provide the insights that help brands win in a competitive, inflation-sensitive market, the retailer will have successfully established a new standard for retail media. For the rest of the industry, the message is clear: the race for the CMO’s trust is now a race to prove that retail media isn’t just a cost center, but a engine of measurable, incremental growth.
