Walmart Connect’s $4.1B Ad Push Is Reshaping Retail Media Budgets

Walmart Connect quietly crossed a milestone that is now impossible for media buyers to ignore. The retail media network reported $4.1 billion in advertising revenue for Q1 2026, a 38% year-over-year increase, according to figures disclosed in Walmart’s May earnings call. That growth rate outpaces Amazon Advertising’s 24% year-over-year expansion in the same period — and it is forcing DTC founders, brand managers, and agency leads to reconsider budgets that have defaulted to Amazon DSP for the better part of four years.

The shift is not purely about platform rivalry. It reflects structural changes in where American consumers are actually shopping. Walmart.com GMV climbed 22% in Q1 2026, and its Sam’s Club e-commerce segment posted a 31% jump. Combined, those numbers give Walmart Connect a first-party data foundation that is increasingly competitive with Amazon’s — and in some grocery, home essentials, and health categories, arguably superior in purchase-intent signal quality.

What Is Driving Walmart Connect’s Sudden Ad Revenue Acceleration?

The acceleration has several mechanics. Walmart’s acquisition of Vizio in late 2024 gave Connect access to SmartCast operating system data across roughly 18 million active households — a connected TV signal layer that Amazon has struggled to replicate at comparable scale outside of its Fire TV ecosystem. Meanwhile, Walmart’s off-site programmatic push, which runs through its partnership with The Trade Desk, has extended Connect inventory into premium publisher environments well beyond Walmart.com and the app.

Then there is the in-store signal layer. Walmart’s 4,600-plus U.S. stores generate purchase data that online-only platforms simply cannot match. The company has been systematically connecting that offline transaction data to its digital ad targeting through its Luminate data platform, giving advertisers a closed-loop attribution path from a display impression to a physical register scan.

“The reason we shifted 18% of our retail media budget from Amazon DSP to Walmart Connect this year wasn’t ideology — it was ROAS data. In pet food and household consumables, Walmart Connect’s sponsored search is returning $6.40 for every dollar we spend. Amazon is at $4.90 in the same categories. That gap is real.”
— Sara Mendenhall, VP of Performance Marketing, Grove Collaborative

💡 Article Summary

Key Insights

1

What Is Driving Walmart Connect’s Sudden Ad Revenue Acceleration?

2

How Are Agencies Restructuring Their Retail Media Teams to Handle This?

3

Which Product Categories Are Seeing the Biggest Budget Shifts?

4

Is Walmart Connect’s Measurement Infrastructure Finally Competitive?

5

What Does This Mean for Marketplace Sellers Running Both Walmart and Amazon?

Source: Ecommerce Times

Grove Collaborative is not an isolated case. Agency buyers at Tinuiti, Wpromote, and Quartile have all publicly noted in recent months that Walmart Connect’s sponsored products CPCs remain 20-35% below Amazon equivalents in several categories, creating efficiency windows that are particularly attractive for brands with thinner margins.

How Are Agencies Restructuring Their Retail Media Teams to Handle This?

The organizational response inside agencies has been messy. Most mid-size performance shops built their retail media practices around Amazon advertising certification and Amazon DSP tooling. Walmart Connect requires a separate platform login, separate creative specs, and a different bidding logic — and until late 2025, the self-serve interface was widely considered underpowered compared to Amazon’s console.

That changed materially when Walmart Connect launched its revamped Campaign Manager in November 2025, which added dayparting controls, audience exclusion lists, and a beta version of AI-assisted bid optimization that sources from Luminate’s purchase-intent signals. Agencies that piloted the updated tool in Q4 2025 reported setup time dropping from roughly four hours per campaign to under 90 minutes.

“We restructured our retail media practice in January to treat Walmart Connect as a co-equal channel alongside Amazon. That meant hiring two dedicated Connect specialists and rebuilding our reporting dashboards in Pacvue to surface Walmart and Amazon data side by side for every client. The operational lift was real, but the client demand justified it.”
— Jason Richter, SVP of Retail Media, Tinuiti

Pacvue, which added Walmart Connect bid automation in its platform in early 2026, has become the go-to third-party management layer for agencies running campaigns across both networks simultaneously. Perpetua and Skai have both extended their Walmart Connect integrations as well, though agency buyers note that Pacvue’s Walmart feature set is currently the most mature among independent tools.

Which Product Categories Are Seeing the Biggest Budget Shifts?

The category dynamics of the budget shift are specific and worth mapping. Walmart Connect is winning disproportionately in:

• Grocery and consumables: Walmart’s grocery dominance in physical retail translates directly to purchase-intent signal quality online. Brands like Church & Dwight and Spectrum Brands have publicly increased Connect spend in this segment.
• Health and wellness (OTC): First-party purchase data from Walmart Pharmacy and in-store health clinics gives Connect a targeting advantage for OTC products that Amazon can’t easily replicate.
• Home essentials and cleaning: High-frequency replenishment categories where Walmart’s customer base over-indexes versus Amazon’s Prime demographic.
• Apparel basics: Walmart’s private label expansion under the Bettergoods and Free Assembly brands has deepened its apparel shopper base, improving signal quality for third-party apparel advertisers.

Amazon, by contrast, retains a clear advantage in electronics, tools, sporting goods, beauty, and high-ASP categories where Prime’s convenience premium and Amazon’s reviews ecosystem remain decisive purchase triggers.

Is Walmart Connect’s Measurement Infrastructure Finally Competitive?

Measurement has historically been Walmart Connect’s Achilles’ heel. Amazon’s Brand Analytics and attribution console, while imperfect, gave advertisers a relatively complete picture of the customer journey. Walmart Connect’s attribution historically lagged by days and lacked multi-touch path data entirely.

The Luminate expansion in Q1 2026 addressed a significant portion of those gaps. Walmart now offers same-day attributed sales reporting for sponsored products, a 14-day and 30-day attribution window toggle, and — most importantly for DTC brands running off-site campaigns — cross-channel attribution that connects a programmatic impression served via The Trade Desk to a Walmart.com conversion.

“I won’t pretend it’s at parity with Amazon’s measurement suite yet. But it’s close enough now that it’s not a reason to avoid the platform. And frankly, some of the Luminate audience segments — particularly the frequent in-store shopper cohorts — are generating attribution data we can’t get anywhere else.”
— Priya Anand, Head of Commerce Media, Wpromote

Third-party measurement providers are catching up as well. Northbeam added Walmart Connect as a tracked channel in its multi-touch attribution dashboard in March 2026. Triple Whale’s Pixel has supported Walmart.com conversion tracking since January. And Nielsen’s Commerce Suite now includes Walmart Connect spend in its retail media mix modeling output, which matters significantly for CPG advertisers running multi-hundred-million-dollar budgets.

What Does This Mean for Marketplace Sellers Running Both Walmart and Amazon?

For the roughly 150,000 brands that are now active on both Walmart Marketplace and Amazon — a number that has grown 41% since 2024 according to Marketplace Pulse data — the budget question is increasingly about marginal ROAS optimization rather than platform loyalty.

The practical implication: brands with healthy Walmart marketplace velocity should almost certainly be testing Connect’s sponsored search before layering in off-site or CTV formats. The sponsored search product remains the most efficient entry point, with new seller incentives currently offering 20% ad credit on the first $5,000 in Connect spend for brands that launched on Walmart Marketplace in the last 18 months.

• Start with sponsored products in your top two or three revenue categories before testing display or video formats.
• Use Pacvue or Skai to manage bids if you’re running campaigns on both platforms — manual management across two consoles at scale is not operationally sustainable.
• Request access to Walmart Luminate’s Category Advisor reports; they’re free for marketplace sellers with $500K-plus in annual GMV and provide search share data that is genuinely useful for keyword strategy.
• Don’t mirror your Amazon campaign structure directly onto Walmart. Search behavior and conversion triggers differ enough that direct campaign cloning consistently underperforms.

The broader story here is structural. Amazon will almost certainly remain the dominant retail media network by total revenue through 2027 — eMarketer projects Amazon at $61 billion in U.S. retail media revenue by end of 2026, versus Walmart Connect at $7.8 billion. But the rate of convergence is faster than most agency buyers anticipated 18 months ago. And in specific categories, at specific budget scales, Walmart Connect is already delivering superior efficiency.

For Shopify merchants selling into both marketplaces, the message is operationally concrete: Walmart Connect is no longer a test budget line. It is a channel that warrants dedicated campaign infrastructure, dedicated measurement tooling, and a budget allocation proportional to your Walmart GMV share — which for most cross-listed brands now sits between 15% and 28% of total marketplace revenue.

Brands that treat it as an afterthought in H2 2026 holiday planning will be leaving measurable revenue on the table.