Walmart is going from bargain bins to header bidding with its planned acquisition of Polymorph Labs, an ad technology firm that will help the retailer compete with Amazon in e-commerce advertising.
On Thursday, Walmart announced its intention to buy the startup, which brings an ad server, header-bidding technology and expertise in self-serve platforms.
The technology from Polymorph is another signal that Walmart wants to build an ad platform to rival Amazon’s growing offering, which took in more than $10 billion in marketing-related revenue last year.
Polymorph Labs has fewer than 50 employees, according to TechCrunch, and raised $10.6 million since its founding in 2013. The deal hasn’t closed yet, and no terms were disclosed.
Walmart already offers marketing services to brands to help them market on its own web properties and beyond, but it does not have a self-serve system like Amazon and the rest of the digital ad world. Self-serve platforms provide brands an automated way to manage ad campaigns, and header bidding is a technology that gives advertisers a virtual backdoor to easily bid on ad inventory across the internet.
“The more Walmart can move toward self-service, the more you’ll see agencies testing their waters,” says Will Margaritis, SVP of e-commerce at Dentsu Aegis Network. “I’m guessing advertisers will like what they find, greatly increasing this revenue stream.”
Amazon-dedicated shops are popping up all over Madison Avenue. For instance, Dentsu just launched an Amazon-focused consulting business named Sellwin Consulting because of growing demand from advertisers.
“It’s easy to imagine Walmart watching this growth and attention Amazon is receiving and growing jealous,” Margaritis says.
Walmart and Target are both following Amazon’s model, in fact -- though since both also have real-world stores, they have insights into shoppers that Amazon doesn’t see.
“There’s an opportunity to build a nice, big business on data they have from shoppers,” says Wes MacLaggan, SVP of marketing for Marin Software, a platform that helps brands buy ads in search social and e-commerce.
Up until a month ago, Walmart had been running much of its ad technology through WPP’s Triad before taking those media buying services in-house, which was an early indication that the retailer was ready to fly solo in its pursuit of ad dollars.
Walmart was not immediately available for comment. It said in a blog post that the acquisition "will enable both existing and new advertisers to control their advertising tactics and spend in real-time and reach their desired audiences more effectively."
Walmart also has a NewFronts presentation set for May 1, when it will look to hook advertisers for its Vudu video service. Amazon has ad-supported video as well, with Fire TV and its new IMDB Freedive. This year, Target has planned a NewFronts event for the first time, too.