When Walmart reported profits on Thursday, it went above and beyond in its support for its advertising division.
For the first time, the retail behemoth reported advertising income, which totaled $2.1 billion globally. A total of $500 million was recognized as revenue gained as a result of a reduction in an advertiser’s cost of sales. The remaining $1.6 billion was devoted entirely to the media industry.
Walmart CFO Brett Biggs said –
“We expect Walmart Connect to continue to scale over the next few years with plans to become a top-10 ad business in the midterm. We continue to make strong progress in some of our newer higher-margin initiatives. Walmart Connect advertising experienced robust sales growth this year with a strong pipeline of new advertisers and large growth opportunities ahead.”
Walmart Connect is an element of Walmart’s reciprocating eCommerce and margin expansion strategy. Whereas the high-margin advertising is important for its “growth algorithm” – a plan to invest substantially in brick-and-mortar revamps and fulfillment while preserving or even boosting its total profit margin.
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