Walmart acquires Polymorph, a state-of-the-art startup, to capture more dollars


Scuba Dive Overview:

  • Walmart has acquired Polymorph Labs, which offers a cloud-based ad serving platform in an agreement whose terms were not disclosed, according to a post on the retailer's blog. Polymorph's founders, product developers and engineers will join Walmart Media Group and Walmart Labs.
  • The integration of Polymorph advertising technology will help brands that sell Walmart to optimize the audience segmentation process based on buying behavior, serve ads, and track results through an automated self-service platform that enables advertisers to take advantage of header bids and real-time auctions.
  • Benefits to advertisers also include real-time features to manage ads and spend, sophisticated ad targeting, and metering tools. Walmart is also planning future platform-based innovations, including machine learning models to optimize ads.

Diving Insight:

The Polymorph agreement comes about when Walmart seeks to help brands advertise on its platform in the same way that Amazon does. Amazon's actions in the advertising industry helped brands of packaged products sell their products through its online platform and have become a rapidly growing source of revenue for the retailer. If Walmart wants to follow, the big chain needs to help connect brands to consumers in a more innovative way. While other retailers, including Target, Albertsons and others are also looking to increase their digital brand offerings to brands, the acquisition of Walmart quickly takes its strategy to a new level.

"If they can integrate a real-time auction bid into multiple pricing models, Amazon will not be the only one to take the budget out of traditional search," said Scott Shamberg, CEO of Performics US, in comments e-mailed to the Marketing Dive.

"It warns its more traditional competitors – build their media networks quickly or be crushed by Walmart's physical and digital ecosystem across the board."

The Polymorph agreement was announced on April 11, the same day that Marc Pritchard, Brand Director of P & G, said digital media needs to be reinvented, as previous efforts to clean it did not go well during a presentation at the ANA Annual Media Conference. According to the executive, questions related to transparency, brand safety and privacy – what he called the "dark side" of digital media – have worsened in some cases. The presentation made it clear that P & G is looking for reliable digital partners to spend its advertising dollars. Given that, the acquisition of Polymorph by Walmart could be seen as an attempt to gain part of P & G's advertising budget that may be available.

Walmart's latest acquisition comes after Walmart brought ad sales internally to its website to help expand its advertising business. This helped Walmart to provide ad services to CPGs interested in working directly with the Walmart team. With the acquisition of Polymorph, Walmart can scale these efforts faster than if it were to build a state-of-the-art technology platform on its own.

"Walmart can not win an arms race with Google or Amazon in engineering, so it makes sense to buy a technology solution," Shamberg said.

While Amazon's advertising business continues to divert advertising revenue from marketers and is even creating its own home-based industries, as evidenced by agencies specifically working to help brands navigate their ecosystem, Walmart is still a viable competitor .

Walmart has data on nearly 160 million consumers who visit its stores and sites weekly, said Stefanie Jay, vice president and general manager of Walmart Media Group, in a blog post. These are significant numbers, and having this data omnichannel is beneficial for brands who wish to accompany buyers throughout the customer's lifecycle. To put this in perspective, Amazon has about 100 million key members.


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