Walmart’s Interest In TikTok’s Ad Business Shows Its Ambitions To Take On Amazon

After Oracle confirmed reports that it won a bid to partner on TikTok’s US business, Walmart said it remains interested in a joint deal to buy TikTok’s US business, which has been under intense scrutiny from the Trump administration. Walmart and Microsoft view the possible acquisition as a way to compete against e-commerce giant Amazon. Walmart cited TikTok’s small but growing ad business as part of the reason why it’s interested in TikTok.

“The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets,” Walmart said earlier in a statement to Business Insider. “We are confident that a Walmart and Microsoft partnership would meet both the expectations of US TikTok users while satisfying the concerns of US government regulators.”

It’s not clear how much of an impact TikTok would have on Walmart’s advertising business, but the hot video app has been making inroads with big ad agencies and brands that want to reach its lucrative Gen Z audience. TikTok also recently launched a self-serve ad platform, which could in theory help Walmart attract a new group of advertisers outside of its core consumer-packaged-goods advertisers.

Walmart declined to comment further on both its bid with Microsoft to acquire TikTok and its advertising business.

Walmart has made a big push into advertising over the past year, poaching talent from large media companies and agencies. After splitting from longtime agency Triad, Walmart has been building an ad business in-house that rivals Amazon’s growing ad business by selling ads to consumer-packaged-goods brands and others that place ads on Walmart’s app and website.

Business Insider recently spoke with five e-commerce agencies and adtech companies about how Walmart’s ad business stacks up against Amazon. They said that while Walmart is ramping up its advertising business, it’s significantly smaller and less sophisticated than Amazon’s.

Curtis Rummel, lead client strategist at e-commerce agency Marketplace Strategy, estimated that clients put 5% to 10% of the budgets that are spent advertising on Amazon with advertising on Walmart. He added that Walmart pitches its advertising business as the company starting from scratch with limited features, even though Walmart had its advertising business Walmart Media Group for years through the now-defunct, WPP-owned ad agency Triad Retail.

“It’s probably not going to be a huge 2020 opportunity but it will probably be 2021 or 2022 when we start to see it pick up pace,” he said.

Advertisers say that they want similar measurement on Walmart and Amazon

In January, Walmart formally launched a self-serve ad platform and API that lets advertisers and a small group of adtech companies buy and manage campaigns on their own. In July, Walmart rolled out a measurement tool that tracks how online ads drive in-store and e-commerce sales.

Rummel said that Amazon’s reporting tools are limited and built using old software, which could give Walmart an opportunity to provide better tools to advertisers…..

Source:: Business Insider


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