Walmart's Sponsored Products and How Brands Can Use Them

Walmart's Sponsored Products and How Brands Can Use Them

Walmart Sponsored Products are here. As the largest retailer in the US, Walmart ads should be an important aspect of your eCommerce advertising strategy and Walmart is taking steps to grow their ad offerings.

According to Walmart, the retailer reached 90% of US households in 2020 and served over 160M customers per week across its various channels. As an omnichannel retailer, Walmart offers advertisers ways to influence online and in-store customers. In fact, 35% of in-store customers visit Walmart.com before heading to their local store.

Earlier this year, Walmart announced the expansion of their media business and a rebranding from Walmart Media Group to Walmart Connect. One of the major aspects of Walmart Connect is a focus on growing advertising offers across Walmart’s digital properties. Walmart Marketplace also shows a commitment to providing additional resources to online retailers.

While Walmart is easily the second largest online retailer next to Amazon, eCommerce advertising options were limited. As the retailer expands focus into eCommerce, they are already showing signs of growing the features and options of Walmart ads.

We have been working closely with Walmart to prepare the Pacvue eCommerce platform to support bid management for the latest major paid search channel on the market. We are very excited to empower Pacvue users to optimize their campaigns across multiple digital advertising channels, now with full support of Walmart Sponsored Products.  

So, what exactly are Walmart Sponsored Products? Let's talk about how they work, who is eligible and how brands can begin leveraging this important new advertising channel.  

Walmart Sponsored Products Ads

The launch of Walmart Sponsored Products provides brands with a major new way to reach and influence consumers. Walmart Sponsored Product ads have been designed to target shoppers who visit Walmart.com to discover, research and buy products.  

Walmart Sponsored Products are pay-per-click ads that appear in three locations on Walmart.com: alongside organic search results, on related product detail pages (PDPs), and in Sponsored Product carousels.

Walmart Sponsored Product Ad Placements | Pacvue Blog
  • Search results: Walmart has reserved a few slots on the first page of results for any given search term as potential placements for Sponsored Products. They've promised to fill no more than two slots with the most relevant sponsored results for any query, reserving the rest of the space for organic results.
  • Sponsored Product Carousels: Appearing in multiple locations including search results, category browsing and on product pages.
  • Buy Box Banner: Located on the PDPs of related products, the buy box banner is a premium placement awarded only to ads with the highest bid and relevancy scores.

Eligibility for Walmart Sponsored Products

Walmart Sponsored Products have specific eligibility requirements in order to maintain the reliability and authority of their search results. Walmart Sponsored Products must be relevant to the search keywords and perform well on the site organically. To be eligible for Sponsored Products, a SKU must:  

  • Belong to a category that is relevant to the targeted search term, with at least one product of the same type appearing organically on the first page of results for that term.  
  • Already have a positive organic search rank. Generally, products must appear in the top 128 organic search results to be eligible for Walmart Sponsored Products.
  • Win the Buy Box; multiple sellers of the same product are listed on the same page and the one that controls the Buy Box is the one that scores the highest for price, in-stock rate, delivery speed and customer reviews.

The above eligibility requirements also contribute to a SKU's relevancy score and the winning Sponsored Products are selected (and their placements are chosen) based on a combination of relevancy and bid.  

Bidding

Walmart uses a first price bidding auction. Advertisers bid on key terms and items, setting their bid at the maximum they're willing to pay per click. Then the winning bidder pays the exact value of their bid each time someone clicks on the ad placement.

Walmart ads have a more straightforward bidding model than Amazon, which uses a second bid auction model. Walmart also requires a maximum bid, which is unique to their platform. This requires a slightly different strategy for setting bids.

Walmart's Sponsored Products and How Brands Can Use Them| Pacvue Blog

Walmart Sponsored Product campaigns come in two forms: automatic and manual. While the main difference between the two bidding types is clear from the names, there are more considerations and different benefits to each. Depending on your specific goals, it is usually best to have a mix of campaigns using automatic and manual bidding.

Automatic Bidding

When launching an automatic campaign, you allow Walmart to determine the optimal placement for ads based on the information contained in the product title, PDP content, category and related products. Product Carousel and Buy Box Banner placements are only awarded to automatic bids.

The advantage of automatic campaigns is how they mine for new terms. They allow your products to leverage terms used by previously undiscovered customer segments, high-performing terms used by competitors, and long-tail research terms you might overlook. And because bids can be set and optimized at a per-product level, you can eliminate the challenge of fine tuning specific bids for dozens of different terms.  

Because Walmart automatically determines optimal placement based on product information, it is vital to optimize product pages with keywords that will show up in relevant search results. Running manual campaigns can even help determine which keywords to include on product pages.

Manual Bidding

Manual campaigns involve bidding on specific keywords and provide more control over which searches your Walmart ads appear in. You choose the keywords and max bids and assign one of three match types:    

  • Exact Match: The shopper searches the keyword or phrase exactly as written.‍
  • Phrase Match: The keyword or phrase is contained in the search, but the search may include additional leading or trailing words.
  • Broad Match: All words in the keyword or phrase appear in the query, but may be in any order and include additional words.

Manual bidding requires more input upfront in exchange for transparency and full control over your campaign, allowing you to leverage your unique knowledge of your product and customers and develop a sophisticated paid search strategy tailored to your marketing goals. For example, if your goal is to build brand awareness, a manual campaign focusing on broad match keywords may be the best strategy.

Manual Sponsored Product ads come with the trade-off of appearing in fewer places on Walmart.com. These ads appear only on the search results page, alongside organic results, and do not appear in Walmart Sponsored Products Carousels or Buy Box Banners.  

Your First Walmart Sponsored Products Campaign

Sponsored Products have been designed to drive traffic to your PDPs, increasing sales, visibility and your organic search rank in turn. Use paid placement to grow your market share by increasing page views and share of voice, and defend your pocket of the digital shelf by driving volume and controlling your most valuable keywords. Follow these steps to craft your first campaign:

  • Before launching a new campaign, take the opportunity to perform a product detail page audit. A complete, high-quality PDP is at the root of a successful ad campaign as it improves a SKU's relevancy, conversion rate and control of the Buy Box.  
  • Launch with a large assortment of products so that you can gather the data to measure and prioritize them according to traffic and ROAS.
  • Run both automatic and manual campaigns. Content-driven auto campaigns can uncover new customers and valuable search data, while keyword-driven manual campaigns allow for targeted defense of your niche and more budgetary control.
  • For automatic campaigns, use bid multipliers to selectively increase bids based on pre-set conditions in order to capture premium (high-conversion) placements like the Buy Box Banner and the first page of search results.  
  • Dedicate more of your budget to manual campaigns, to prioritize spending on known targets and specific queries known to drive conversion and reduce waste.  
  • Reserve up to 30% of your Sponsored Products budget for test and learn campaigns, using the various reporting tools available from Walmart to measure results, identify trends and discover new opportunities. These include performance reports by day, item, keyword, ad group, page type and platform.

Walmart ads already deserved a place in your eCommerce advertising strategy, but the growth seen in 2020 makes them a necessity. Walmart Connect more than doubled their net new advertisers last year and the further commitment to Walmart.com advertising and Walmart Marketplace is a promising sign for future growth. In the next year, expect more options for search and display media.

Based on the way Walmart determines eligibility for Sponsored Products ads, it is vital for advertisers to establish their brands on Walmart.com as early as possible and prioritize maintaining their Share of Voice on the marketplace.

Pacvue works with Walmart to integrate new and existing features to help advertisers manage and automate Walmart advertising campaigns. As Walmart improves their offerings, look forward to new Pacvue features to help you keep up with the competition.

Want to learn more about Walmart Advertising? Check out our blog posts:

To make sure you don't miss the latest news, product updates and best practices from the leading eCommerce marketplaces, follow the Pacvue Blog.  

Pacvue President Melissa Burdick led a panel discussion on “Advertising on Amazon for Maximum Impact”
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