Walmart Connect, the U.S. advertising unit of retail giant Walmart, has seen impressive growth in revenue in the second quarter of fiscal year 2025. According to an earnings statement, Walmart Connect experienced a 30% year-over-year increase in revenue, while the company’s global advertising business, which includes India-based Flipkart, saw a 26% year-over-year growth. Although specific revenue figures for advertising are not disclosed, Walmart has revealed that the business generates billions annually.
One of the key drivers of growth for Walmart Connect during this period was marketplace sellers, smaller and emerging brands that sell their products through Walmart. Advertising sales from this category surged nearly 50%, showcasing the importance of these sellers to Walmart’s advertising business. Walmart CEO Doug McMillon highlighted the contributions of newer businesses like marketplace, advertising, and membership, emphasizing how they are diversifying profits and strengthening the resilience of the company’s business model.
In an effort to expand its advertising reach, Walmart Connect has been focusing on increasing the number of places where its advertising partners can buy media. Both in-store and offsite channels have been key priorities for the retail media network. More advertisements have been appearing in various locations such as self-checkout lane screens, TV aisles, sampling stations, and even over Walmart’s store radios. This strategic move aims to better monetize Walmart’s extensive brick-and-mortar footprint.
In the offsite arena, Walmart Connect has been forging partnerships with publishers like Disney to leverage its first-party shopper data for more targeted and measurable ads on connected TV. The recent acquisition of smart TV maker Vizio for $2.3 billion further solidifies Walmart’s presence in the video advertising space. Additionally, the growth of Walmart’s e-commerce business in Q2 likely contributed to onsite advertising, which refers to campaigns that run on properties owned by Walmart.
The impressive performance of Walmart in Q2 has garnered positive reactions from Wall Street, with the company beating sales estimates and raising its outlook for the full year. U.S. comparable sales increased by 4.2%, while consolidated revenues rose by 4.8% to $169.3 billion. Advertising and membership growth played a significant role in driving over 50% of the operating income growth for the quarter, according to CFO John David Rainey. This highlights the importance of these faster-growing, higher-margin segments of Walmart’s business in shaping the company’s financial performance.
Overall, Walmart Connect’s strong revenue growth, coupled with the company’s focus on expanding advertising channels and strategic partnerships, underscores Walmart’s commitment to driving innovation and maximizing the potential of its advertising business. As Walmart continues to evolve and adapt to changing market dynamics, its advertising unit is poised to play a crucial role in driving growth and profitability for the retail giant.
