Q4 advertising spending increased by 16%! Are brands beginning to flock to Walmart advertising?

Walmart’s advertising business, WalmartConnect, saw significant growth in the fourth quarter of 2022, with ad spending on various sponsored ad formats up 31% year-over-year, according to a new report from Pacvue.

The report shows that in the fourth quarter, brands increased their spending on WalmartConnect by 16.07%. The return on advertising expenditure also increased by 83% year-on-year, from $3.32 to $6.06.

Data shows that in the fourth quarter, Walmart search advertising increased significantly by 17.95% month-on-month and 31.49% year-on-year. Compared with 2021 (0.30%), the click-through rate of ads in the fourth quarter of 2022 doubled, increasing by 0.62%; on the contrary, the cost per click (CPC) decreased by 25% compared with 2021.

Walmart continues to make progress in the retail media space and will gain more share in the coming years. Last year, Walmart established a second-price auction model for its ads, effectively reducing its average CPC and increasing its return on ad spend. These efforts helped Walmart increase its ad revenue by nearly 40% in 2022.

Also last year, Walmart’s digital advertising revenue in the U.S. reached $2.22 billion, making it the only retail media platform other than Amazon to have total revenue of more than $1 billion and second among all retail media platforms. By 2022, Walmart’s retail media network share was 5.9%.

The data reflects that Walmart is in a favorable position in the US digital advertising market due to the deprecation of cookies and third-party identifiers, coupled with increased privacy legislation and regulatory restrictions.

Walmart’s net U.S. advertising revenue is expected to nearly triple between 2021 and 2024 to $4.52 billion, accounting for 8.2% of U.S. retail media spending, according to Insider Intelligence. By 2024, Walmart is positioning itself as one of the most important “players” in the retail media ecosystem.

Data from GroupM shows that global investment in retail media reached US$101 billion in 2022, up 15% from US$88 billion in 2021.

This investment represents 18% of the total budget allocated to digital advertising and 11% of total global advertising investment. Or equivalent to 1.8% of global e-commerce gross merchandise volume (GMV). In the next five years, they expect advertising investment in retail media to exceed $160 billion, a growth rate of 60%.

Editor✎ Ashley/

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