Recently, Walmart acquired Vizio for $2.3 billion – which has sent ripples through both the retail and digital marketing worlds. While some may see this as merely a purchase from a TV manufacturer, the reality runs much deeper.
5 Ways this Could Reshape the Landscape
We believe Walmart’s interest lies in leveraging Vizio’s SmartCast Operating System to grow its advertising arm, Walmart Connect. Here are five reasons why we believe this acquisition matters and how it could reshape the digital marketing landscape.
1. Vizio’s Market Reach
Vizio’s transformation from a TV manufacturer to a media company is key to understanding this purchase. Its SmartCast Operating System is the central reason this is all happening. It shifted how viewers consume content by offering a seamless streaming experience — without additional devices. Through the acquisition, it provides Walmart with valuable advertising opportunities. With 18 million active accounts, SmartCast is a huge platform for Walmart to reach consumers directly in their moments of discovery.
2. Data Power
Combining Walmart’s shopping insights with Vizio’s viewing data creates a powerful combination for targeted advertising via Connected TV (CTV). Vizio’s automatic content recognition technology allows for a unique understanding of viewers’ preferences, enabling personalized ad placements. This combined effect promises the ‘holy grail’ for advertisers—measurable effectiveness leading to purchases.
3. Ad Profitability Shift
In a landscape where traditional retail margins are slim, advertising emerges as a highly profitable venture for Walmart. According to Corey Tarlowe, a retail analyst with Jefferies, explained to CNBC, “With operating margins exceeding 65%, advertising dwarfs the profitability of retail operations.” Advertising efforts will surpass Walmart’s retail business (i.e., products purchased on shelves/online). By expanding its advertising capabilities, Walmart will accelerate its profit growth, mirroring the success of competitors like Amazon.
4. TV Ad Expansion
The Vizio acquisition puts Walmart’s advertising business into uncharted waters. Beyond in-store displays and online banners, Walmart gains access to TV ad spots on streaming services (i.e. Netflix or Disney+). This diversified portfolio will offer advertisers a wide selection of advertising options, making Walmart an even bigger retail media giant.
5. Future Dynamics at Play
As Walmart moves further in the digital advertising arena, speculation arises about its competitors and their next moves. Marc Cerniglio, Chacka Marketing’s Data & Reporting Lead, suggests, “We could see potential targets like Roku, a leading player in streaming devices, be up for play. What if Target follows this trajectory like Walmart? We could witness a consolidation of manufacturers and retail giants, reshaping the competitive ad landscape.”
What’s Next
Walmart’s acquisition of Vizio is an interesting deal to watch. Could Walmart be ready to dominate the digital advertising business, or will its competitors follow in similar footsteps? Let us know your thoughts.
Partnering with experts like Chacka can unlock new opportunities for businesses looking to leverage targeted advertising like CTV. Contact us today to get started.
