Amazon might be the online sales leader, yet Walmart is still the largest retailer in the US. According to Adobe Analytics, Walmart reached 95% of US households in 2018 and served over 160M customers per week across its multiple channels. Brands and advertisers are likely to work with both retail giants, but with the release of Walmart's Sponsored Products, balancing the two major platforms is going to become even more important.
From bidding to metrics, we lay out the key differences between Amazon and Walmart below. For more specifics about ad campaigns, see Walmart vs. Amazon: 5 Key Differences in Paid Search.
Key difference: Walmart levels the CPC playing field.
Amazon and Walmart operate on different ad auction models. Walmart advertising is based on a first bid auction, which means an advertiser will pay their maximum cost-per-click (CPC) bid, while Amazon advertising is based on a second bid auction, which means an advertiser’s CPC will be one penny over the second-highest bidder.
For example, if an advertiser had a maximum CPC bid of $4 and the second-highest bidder was $3, the advertiser would pay $4 CPC on Walmart’s first bid auction and $3.01 on Amazon’s second bid auction.
On the surface, this would seem to suggest that Walmart's ad placements will cost you more, but in practice this actually helps to level the playing field. With a second price bid auction such as Amazon’s, advertisers can effectively game the system by bidding extremely high, confident that they won't have to pay the full price while blocking anyone else from winning the placement.
This means advertisers should only set bids for CPCs they’re comfortable paying. Advertisers should incrementally adjust bids up or down to find the appropriate bid level to maximize sales at a target efficiency.
Key difference: Amazon provides more varied attribution windows.
Amazon and Walmart share common metrics such as clicks, impressions, sales, and more. However, attribution windows differ. Walmart provides sales metrics in 3-day and 30-day attribution windows, while Amazon provides attribution windows of 1-day, 3-day, 14-day and 30-day through its API.
Walmart could potentially have an advantage over Amazon with its retail data, and the possibility to attribute online search activity to in-store sales. For now, though, Walmart isn’t offering its retail and audience-level data for ad targeting.
Key difference: Walmart promises more customization for advertisers.
Both Amazon and Walmart provide bid modifiers to be placed on different ad placements such as search results or product detail pages. However, Walmart offers additional modifiers to be placed on different device placements such as desktop, mobile app and mobile web. Walmart also provides reports and data on the different device placements so advertisers can make data-driven device optimizations.
Automatic campaigns bids can be set at the item level on Walmart, whereas automatic campaigns bids are set at the campaign level on Amazon. This allows Walmart advertisers to group like products within the same auto campaign, but have individual bids appropriate to each product. In order to have the same granular item level bidding for auto campaigns on Amazon, an advertiser would need to create a single campaign per ASIN.
- Ad Types
Key difference: Organic placements are dwindling on Amazon's first page.
Amazon has multiple self-service ad products: Sponsored Product (both auto and manual), Sponsored Brand and Sponsored Display. Walmart currently only has Sponsored Product (both auto and manual) campaigns.
Both Amazon and Walmart have Sponsored Product ad placements on the search results page. Walmart has specific requirements that must be met in order for a Sponsored Product ad to appear on the search results page. A product must appear in the top 128 organically for a targeted keyword to appear on search results ad placement. Amazon doesn’t have a similar requirement for their ad placement on the search results page.
Amazon offers so many ad placements that organic results now control a minority of first page real estate for the most common search terms. The pro-Amazon argument is that more ad real estate means more opportunity to get your products in front of shoppers. Conversely, one might argue that it is creating more confusion for consumers.
Walmart is becoming more attractive for advertisers as Amazon is becoming pay-to-play. Brands need to keep spending more on Amazon to remain competitive and keep organic placements on the first page.
Amazon and Walmart’s paid search platforms have some fundamental differences that affect how advertisers should approach them strategically and financially. Both offer value, unique benefits and have a place in a comprehensive, cross-platform digital ad portfolio.