Walmart’s Ad Business Accelerates During Fiscal Q2
Walmart’s advertising division continues to drive significant growth, proving to be a strategic asset amid the economic pressures of rising tariffs. The retail giant’s U.S.-based retail media arm, Walmart Connect, experienced a 31% year-over-year increase last quarter. Meanwhile, Walmart’s overall global advertising business recorded a 46% jump, underscoring the company’s successful expansion into digital ad services.
According to Walmart executives, the company’s ability to absorb some of the costs associated with tariff hikes is bolstered by strong performance in alternative revenue streams like advertising and membership services. “From a business model point of view, the fact that we have businesses like advertising and membership growing obviously help with flexibility,” said Walmart CEO Doug McMillon during the company’s fiscal Q2 earnings call.
Acquisition of Vizio Enhances Advertising Capabilities
Walmart’s acquisition of connected TV (CTV) manufacturer Vizio for $2.3 billion last year is beginning to show its value. This strategic move has significantly deepened Walmart’s data capabilities and enhanced its reach in video-based advertising. Notably, the current growth figures for Walmart Connect do not yet include revenue from Vizio, indicating even more potential for future expansion.
The integration of CTV and retail media has gained momentum throughout the year. As advertisers increasingly seek performance-driven outcomes from traditionally brand-focused channels like premium video, Walmart is positioning itself to capitalize on this convergence.
Advertising and Membership Services Provide Strategic Flexibility
Walmart’s diversified business model has become a critical asset during turbulent economic times. With tariffs impacting the cost of goods, the company has committed to keeping prices “as low as we can for as long as we can,” McMillon stated. Simultaneously, the company acknowledges that lower- and middle-income consumers are beginning to adjust their spending habits, especially on non-essential items.
Growing revenue from advertising and membership offerings like Walmart+ provides Walmart with the financial flexibility to navigate these shifting market dynamics. Executives emphasized that these segments are “obviously key” to the retailer’s long-term strategy.
E-commerce Momentum Fuels Advertising Growth
In addition to retail media, Walmart’s e-commerce operations saw notable gains. U.S. online sales rose 26% year-over-year, while global e-commerce increased by 25% during the same period. This digital acceleration complements the growth in advertising, as more consumer interactions occur online, providing advertisers with valuable opportunities to engage shoppers.
Walmart+ continues to gain traction as well, further contributing to the company’s robust digital ecosystem. The membership service not only drives customer loyalty but also generates additional data that enhances Walmart’s ability to deliver targeted advertising.
Revised Full-Year Outlook Reflects Optimism
Buoyed by its strong performance across advertising, e-commerce, and membership services, Walmart has revised its full-year financial outlook. The company now expects net sales to grow between 3.75% and 4.75%, an increase over its previous projection of 3% to 4%.
This optimistic guidance reflects the confidence Walmart has in its diversified revenue streams, particularly as it continues to invest in technology, data infrastructure, and strategic acquisitions like Vizio to strengthen its competitive position.
Retail Media’s Rising Influence in Advertising
Walmart’s success mirrors broader industry trends where retail media is becoming an indispensable component of marketing strategies. As advertisers seek more measurable outcomes, platforms that combine shopper data with advanced targeting capabilities—like Walmart Connect—are drawing increased investment.
Retailers with substantial first-party data and digital reach are in a prime position to offer advertisers new ways to connect with consumers. Walmart’s ability to merge performance marketing with brand-building tools like video is a testament to its evolving advertising model.
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