Is Walmart advertising part of your eCommerce strategy? Ecommerce sales rose considerably in 2020 for the retail giant, increasing from $28.45 billion in 2019 to $41.01 billion in 2020.
It’s important that advertisers have a presence on sites where their customers shop to reach and engage them at every stage of their purchase journey. Retail sites like Walmart are typically the first place where consumers start their purchase journey. In fact, 50% of shoppers start their product discovery on retail sites.
However, Walmart is a very different marketplace compared to Amazon and other eCommerce markets. Before adding Walmart advertising to your eCommerce strategy, here are the top 5 things that advertisers should know:
#1: Walmart Sponsored Products offers several different ad placements.
Walmart Sponsored Products allows advertisers to increase visibility with Walmart advertising by offering ad placements on the first page of search grids, category pages, and product description pages. Walmart does not currently offer Sponsored Brand advertising options, but several Sponsored Product options allow advertisers to grow brand awareness in some ways.
Here are the main Walmart advertising Sponsored Products ad types:
- Search Results: The first few slots in Walmart’s organic search are reserved for paid search Sponsored Products. In order to maintain the reliability of organic searches, these Sponsored Products must be related to the search based on Walmart advertising’s ad relevancy measurements.
- Search Brand Amplifier: This display ads options provides advertisers an opportunity to build brand recognition while displaying products at the top of search results pages. Search brand amplifiers include a brand logo, headline, and three SKUs.
- Sponsored Product Carousels: Carousels appear in multiple locations including search results, category browsing and on product pages as alternate purchase options for consumers.
- Buy Box Banner: This ad appears in related product detail pages as an alternate purchase option. Buy box banners are premium placements only given to ads with the highest bid and relevancy scores.
According to early trends and insights from Pacvue’s Walmart advertising platform, ad placements on the search page accounted for 43% of total brand ad spend. Item Detail Pages account for 39% of ad spends and Browse Page ads take up 17% of spend.
Search and Browse ad placements provide the best ACoS with both around 4-5%. By comparison, item page ad placements are much less efficient with an ACoS at 10%.
#2: Walmart advertising bids are based on First Bid Auctions and have both a minimum and a maximum bid.
The most important thing to know about Walmart Sponsored Products is that it uses a first bid auction model. First bid auction means that the winning bid during an ad auction is the max CPC bid. This differs from Amazon Advertising which uses a second bid auction model. With a second bid auction, the winning bid is a penny over the second highest bid amount. Because of this major difference, advertisers will need to adjust their bidding strategy between these two ad platforms.
Below is an example showing the difference between a first bid and a second bid ad auction.
Walmart Sponsored Products has a minimum bid level for both Automatic and Manual campaigns. The minimum bid for Automatic campaigns is $0.20 and the minimum bid for Manual campaigns is $0.30. For both campaign types there is a $20 max bid. This differs from Amazon Advertising which has a minimum bid of $0.01 and no cap on maximum bid.
The $20 max bid on Walmart Sponsored Products somewhat levels the playing field. Advertisers can’t just continually raise bids to dominate the sponsored results. In cases where there are multiple advertisers at the max $20 CPC bid it is important to have SEO optimized detail pages to increase relevancy and win the ad auction.
Determining the ideal bid for your campaigns will require some testing. On average, Browse page ad placements have a CPC of $0.36. Search page ads, such as sponsored results and Search Brand Amplifier ads, have an average CPC of $0.41. Item page ads have the highest CPC at $0.56.
Keep in mind, Walmart advertising metrics are based on a different attribution model than Amazon. While Amazon has a 14-day attribution window which is click-only, Walmart uses a 30-day window with both views and clicks.
#3: There are various criteria for winning Sponsored Product ad placements, but the two main criteria are relevancy and bids.
Much like Google, which factors in a relevancy measure such as Quality Score, Sponsored Products on Walmart are selected based on a combination of ad relevancy and bid amount. The most relevant product with the highest bid will win the Sponsored Product ad placement. Additionally, to win a Sponsored Product placement, the advertised product must:
- Appear within the top 128 organic search results
- Be winning the Buy Box
- Rank lower than, or equal to, the organic search ranking for that product
- Fall in the same product category as the search query
- Be the same product type of at least one non-sponsored item in the top 20 search results
Walmart’s goal with these requirements is to improve the quality of organic search results and ensure relevant Sponsored Products. A high ad relevancy score shows Walmart that your product meets their standards and will provide a positive experience for consumers who click on your Sponsored Product ad.
Winning Sponsored Product ad placements should be the top goal of your Walmart advertising strategy as it can have a significant impact on your success on the platform. Electronics and appliances manufacturer Hisense saw a 71.8% increase in Return on Ad Spend month-over-month by building and optimizing a highly efficient Walmart Sponsored Products strategy. Using Pacvue’s reporting feature they were able to evaluate performance by placement, including Buy Box and Search In-Grid ads, and by platform to adjust bid modifiers. This strategy also improved click-through rates by 55.6% and reduced CPC by 10% month-over-month.
In general, spend on Walmart can be split between three page type ad placements. Advertisers spend an average of 43% of ad spend on search pages, 39% on item detail pages, and 17% on browse page ad placements.
#4: Walmart Sponsored Products has both Automatic Campaigns and Manual Campaigns.
Walmart offers options for both automatic and manual campaigns. These different campaign types offer more features and benefits than simply automation:
Sponsored Product ads with this campaign type will be automatically served to the most product relevant keywords being searched. Bids can be set and optimized at the product level.
Automatic campaigns provide the most reach as these ads can show up in the search grid, carousel placements across the site, and in the buy box on product description pages.
Because automatic campaigns uses product pages to determine which search keywords to display ads in, you must be more deliberate when optimizing product pages. The keywords you place in your listing title, description, and other listing section when using automatic campaigns will inform the campaign placement.
Sponsored Product ads with this campaign type will be served based on keywords manually selected by the advertiser and matched to the consumer search query on Walmart.com. Keywords can be selected as either Broad, Phrase or Exact match keywords. Bids are set and optimized at the keyword level for all products contained within the campaign.
Depending on your business goals, you may want to more specifically tailor which keywords you target. Broad match keywords can be used to increase impressions and drive brand awareness. Using phrase and broad match keywords can also help identify new search terms to focus on by using Pacvue’s search term report.
Manual campaigns do not have quite the same reach as Automatic campaigns as these campaign types only appear in the search results grid. However, Manual campaigns give greater transparency and more control than Automatic campaigns, allowing you to build a much more sophisticated search strategy that maximizes your search investments.
#5: Your product description page is the most important asset in your Walmart search strategy.
As mentioned in our last two points, your product description page will have a significant effect on the success of your Walmart advertising. Set up your Walmart Sponsored Product campaigns for success by optimizing your product detail pages to drive conversion and increase sales.
The product detail page should have meaningful content, high quality photos, high ratings & reviews and be search optimized for your core keywords. Aim for a content quality score of at least 95% for all your product pages. This determines if you show up in Sponsored Product ad placements.
In addition to overall quality, focus on improving your page’s relevancy score. This will improve its organic search ranking which is a requirement for winning Sponsored Product ad placements. Your product reviews, price, and popularity will also affect organic search and can either improve or hurt your ad placements and conversion rates as well.
While Walmart requires a different ad strategy to Amazon, it offers an attractive opportunity. Since Walmart Advertising isn’t as mature of a platform as Amazon Advertising, there is tremendous opportunity for early adopters on an emerging marketing platform like Walmart. Currently, advertisers can expect less competition and lower CPCs than on Amazon, which may in turn lead to a higher ROI.
Don’t make the mistake of simply transferring your campaigns over from Amazon. Take the time to learn what works for Walmart and fully utilize performance data. Keeping the above 5 Things to Know About Walmart Advertising in mind, now is a great time to start advertising on Walmart.