Retailers are leveraging shoppers’ data to sell more ads before the holidays

CHICAGO, Nov. 17 (Reuters) – There’s more than just goods for sale this holiday. So are the buyers.

Walmart, Amazon.com, and other major retailers that store data on shoppers’ purchases are selling more digital ads on their own websites and in stores – including pop-up banners and search bar keywords – to marketers looking to promote their products.

Retailers want to use their insights into consumer behavior to attract advertising money from packaging manufacturers such as Procter & Gamble (PG.N) and Kraft Heinz (KHC.O) as companies face new challenges in targeting online marketing.

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Walmart said Tuesday that its advertising business grew nearly 240% on a two-year basis in the third quarter. The ads help “suppliers and marketplace vendors sell more while creating a new opportunity for us to profit,” said Chief Executive Officer Doug McMillon. In addition to growing in the United States, Walmart’s advertising revenue is growing at its Mexican business and Flipkart.com unit in India.

Last week, the US grocery chain Albertsons launched its own media network, the Albertsons Media Collective. In October, Kroger Precision Marketing launched by Kroger Co (KR.N) – supported by the takeover of a data analysis company in 2015 – a private advertising marketplace that gives brands a tool with which they can buy digital advertising space more efficiently.

The advertising surge comes while other marketing channels are closed.

Apple Inc (AAPL.O) introduced privacy changes in April that prevent advertisers from tracking iPhone users without their consent. Alphabet Inc’s Google (Google L.O.) will abolish Chrome web browser cookies in 2023, which store information about users’ browsing habits and help advertisers determine product interest.

Retailers, meanwhile, are hoping to get manufacturers to buy ads on their websites and shopping apps. From the British Tesco to the US Target (TGT.N), retailers have been trying to capture a niche in the media world for years. But now, booming ecommerce sales are helping them gather more potentially valuable data on shopper behavior.

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Of course, Amazon.com (AMZN.O) is the only retailer to have come anywhere near challenged the dominance of Facebook and Google, whose annual U.S. advertising revenues have surpassed $ 15 billion. Reuters announced last year that Walmart was well on its way to making nearly $ 1 billion in ad sales in 2020. That compares to Facebook and Google’s US advertising revenue of around $ 40 billion each, according to eMarketer.

Walmart is looking to grow its advertising business after more than a decade of stuttering strides. In August, the retailer updated its platform to offer brands a demand-side platform to help them purchase digital ad space more efficiently.

Almost all of the top 10 retailers by global sales, including Target and Home Depot (HD.N), have started advertising businesses, and more are expected to follow, said Eric Franchi, partner at MathCapital, which invests in marketing and media startups .

Target said its media business, Roundel, is an important part of its business and a growth driver.

Brands spent 66% more on retail media during the 2020 holidays than they did a year earlier, according to Skai, a data company that works with brands that buy ads from Amazon, Walmart and Target.

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Reporting by Richa Naidu, Sheila Dang, and Aishwarya Venugopal; Editing by Vanessa O’Connell and Leslie Adler

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