Wal-Mart Stores Inc (NYSE:WMT) is suddenly finding a major new revenue growth source, following in the footsteps of its largest competitor.
As CNBC notes, just like e-commerce behemoth Amazon, WMT is now embracing advertising on its platform as a key to greater riches:
According to KeyBanc’s Ed Yruma, Wal-Mart’s website has started to show banner ads by third-party sellers more frequently, with links to product pages or vendor websites. Historically, Wal-Mart’s online ads have highlighted its own products or discounts, Yruma said.
On top of that, Wal-Mart has recently started linking its in-store and online shopping data, giving more in-depth data that advertisers could play with, he said. Wal-Mart already offers plenty of online ad options, including display media, native ads and programmatic buying programs.
“We believe Walmart recently began intensifying focus on its advertising business,” wrote Yruma in a note to clients earlier this week.
While Walmart’s online business is still a fraction of Amazon’s, it’s growing fast: the latest estimates peg a 60% year-over-year growth rate. That growth, combined with in-store data the company has from its thousands of brick-and-mortar locations, provides a unique and potentially very lucrative combination that advertisers are sure to love.
Like its online business itself, advertising represents a major new growth driver for the company. Advertising is one of Amazon’s fastest growing businesses, seeing an estimated 50% annual growth rate, and analysts expect it to generate some $3 billion for AMZN this year alone. Walmart is smartly doing the same.
Wal-Mart Stores Inc shares closed at $80.40 on Friday, down $-0.26 (-0.32%). Year-to-date, WMT has gained 17.96%, versus a 10.22% rise in the benchmark S&P 500 index during the same period.
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