Walmart Connect’s Retail Media Revenue Surges 41% as Sellers Shift Budget From Amazon Ads

Walmart Connect reported $1.9 billion in advertising revenue for Q1 2026, up 41% year-over-year, according to figures disclosed during Walmart’s May earnings call. The growth rate is nearly double Amazon’s retail media expansion pace over the same period, and it is reshaping how third-party sellers and DTC brands allocate their performance marketing budgets heading into the second half of the year.

The numbers come at a pivotal moment. Amazon Sponsored Products CPCs climbed an average of 18% in Q1 2026 compared to Q1 2025, according to data from Perpetua and Pacvue. For mid-market sellers running between $2 million and $20 million in annual GMV, that CPC pressure has made Walmart Connect’s comparatively lower auction floors — and its rapidly improving attribution tooling — increasingly attractive.

What Is Driving the Shift From Amazon Ads to Walmart Connect?

The migration is not happening uniformly. Sellers who are already live on Walmart Marketplace with strong organic rankings are the first movers. For them, Walmart Connect’s Sponsored Products CPCs average $0.48 to $0.72 in categories like home goods, sporting goods, and consumables — compared to Amazon equivalents often running $1.20 to $2.40 in the same verticals, according to agency benchmarks shared with Ecommerce Times by Tinuiti and Quartile.

“The ROI gap is hard to ignore,” said Katrina Lowe, VP of Marketplace Strategy at Tinuiti. “We have clients in the pet and personal care categories where Walmart Connect is delivering a 4.2x ROAS against Amazon’s 2.8x on equivalent SKUs. That’s not a rounding error — that’s a budget reallocation conversation.”

“Walmart Connect is no longer the scrappy alternative. For our mid-market book, it’s now a primary channel in its own right. We’re building full-funnel strategies there the same way we did on Amazon four years ago.” — Katrina Lowe, VP of Marketplace Strategy, Tinuiti

💡 Article Summary

Key Insights

1

What Is Driving the Shift From Amazon Ads to Walmart Connect?

2

How Is Walmart Connect’s Ad Product Suite Evolving in 2026?

3

Which Seller Categories Are Winning on Walmart Connect Right Now?

4

How Are Third-Party Tool Vendors Responding to Walmart Connect’s Growth?

5

What Does Walmart Connect’s Growth Mean for Amazon’s Retail Media Dominance?

Source: Ecommerce Times

Walmart has also invested heavily in its closed-loop measurement stack. The launch of Walmart Luminate Premium in late 2025 gave approved sellers and their agencies access to SKU-level purchase data, basket affinity signals, and in-store conversion attribution — capabilities that DTC brands said had been the network’s most significant blind spot.

How Is Walmart Connect’s Ad Product Suite Evolving in 2026?

Beyond Sponsored Products, Walmart Connect has been quietly building out a DSP-equivalent capability through its partnership with The Trade Desk, formalized in January 2026. The integration allows brands to activate Walmart’s first-party shopper data — covering 140 million weekly U.S. shoppers — across off-platform programmatic inventory, including CTV, display, and audio.

Key ad products now available on Walmart Connect as of June 2026 include:

• Sponsored Products: Keyword and auto-targeted placements in search results and item pages, now available via API to Pacvue, Perpetua, Quartile, and Skai
• Sponsored Brands: Header banner placements with video creative support, rolled out to all sellers in March 2026
• Display Ads: On-site and off-site placements with Walmart Luminate attribution
• CTV via The Trade Desk: First-party audience targeting available to brand-registered sellers spending more than $50,000 per quarter on Connect
• In-Store Digital Screens: Walmart’s 4,600-store network now offers programmatic access to 170,000 digital end-cap and checkout-lane screens

The in-store digital inventory is a particular differentiator. Amazon has no equivalent physical retail footprint, and brands like Energizer, Church & Dwight, and Spectrum Brands have reportedly committed seven-figure upfronts to lock in premium in-store placements through Q4 2026.

Which Seller Categories Are Winning on Walmart Connect Right Now?

Category performance on Walmart Connect is uneven. Consumables, household products, and private-label grocery adjacent items show the strongest ROAS, partly because Walmart’s shopper base skews more toward replenishment purchasing than discovery. Electronics and apparel are lagging, where search intent on Walmart.com remains less commercial than on Amazon.

Jason Boyce, founder of Avenue7Media and a longtime Amazon strategy consultant, noted the category dependency is real. “If you’re selling a commodity consumable — laundry detergent, paper goods, supplements — Walmart Connect is almost certainly underweighted in your media mix right now. If you’re selling a $300 coffee maker, Amazon still dominates the intent funnel.”

“The mistake sellers make is treating Walmart Connect as a backup channel. For the right SKU profile, it should be getting equal or greater investment than Amazon Ads. The auction is less competitive and the conversion data is cleaner than it was 18 months ago.” — Jason Boyce, Founder, Avenue7Media

Sellers in health and wellness have also found Walmart Connect particularly effective following Walmart’s 2025 expansion of its Better for You product badging program, which surfaces algorithmically curated health-oriented SKUs in dedicated search modules. Brands that qualify for the badge report a 22% lift in click-through rate on Sponsored Products placements, according to internal data shared by one mid-market brand manager who asked not to be named.

How Are Third-Party Tool Vendors Responding to Walmart Connect’s Growth?

The ad tech ecosystem is moving quickly to support the shift. Pacvue launched a dedicated Walmart Connect dashboard in April 2026 that integrates Luminate data directly into its bid optimization engine — a first for the category. Perpetua followed with a Walmart-specific dayparting and budget pacing module in May. Skai, which historically skewed toward CPG enterprise accounts, has added Walmart Connect as a first-class channel in its unified retail media console.

The tool investment matters because Walmart Connect’s API maturity, while improving, still trails Amazon’s Advertising API by roughly 18 to 24 months in terms of granularity and real-time data throughput. Sellers running manual campaigns directly in Walmart’s self-serve interface report a clunkier workflow than Amazon Seller Central’s campaign manager — though multiple agency operators said the gap is narrowing meaningfully with each quarterly platform update.

Staffing is also shifting. At least four of the top 15 Amazon-focused agencies told Ecommerce Times they have added dedicated Walmart Connect specialists to their teams in the first half of 2026, a hiring signal that would have been nearly unthinkable as recently as 2024.

What Does Walmart Connect’s Growth Mean for Amazon’s Retail Media Dominance?

Amazon still commands an estimated 75% of U.S. retail media ad spend, according to eMarketer’s May 2026 forecast. Walmart Connect’s $1.9 billion quarter translates to a roughly 9% share of the market — up from 6% a year ago. The trajectory is meaningful but should not be overstated.

What is changing, according to buyers and brand managers, is the negotiating leverage. Several brands with over $5 million in annual Amazon ad spend told Ecommerce Times they are now using Walmart Connect performance data in Amazon account reviews to push back on managed service fees and demand better placement guarantees. The existence of a credible alternative is itself a market force.

There are also structural tailwinds. Walmart’s acquisition of Vizio in February 2024 gave it direct access to ACR data from roughly 19 million smart TVs, which Walmart Connect has been progressively integrating into its audience segments. A seller selling outdoor furniture can now target Walmart.com shoppers who have watched home improvement programming in the past 30 days — an audience layer that was unavailable on the platform as recently as Q3 2025.

What Should Sellers Actually Do With Their Walmart Connect Budget in H2 2026?

Agency operators are converging on a few tactical recommendations for sellers looking to capitalize on Walmart Connect’s improving infrastructure before the auction gets crowded:

• Audit your catalog for Walmart eligibility first. Walmart Marketplace’s listing quality score directly affects Sponsored Products eligibility and Quality Score, similar to Amazon’s listing completeness requirements. Incomplete bullet points and missing secondary images will hurt ad performance regardless of bid levels.
• Start with exact-match Sponsored Products on your top three to five revenue SKUs. The auction is still thin enough that brand-new campaigns can achieve page-one placement within 48 to 72 hours at moderate bids — a window that likely closes as more sellers enter.
• Request Luminate Premium access through your Walmart account manager. The waitlist has shortened considerably since Q1 2025. Access to item-level purchase data changes how you evaluate ROAS and informs suppression lists for wasted spend.
• Connect Walmart Connect to Pacvue or Perpetua for automated bidding. Manual management at scale is inefficient, and the platforms now have enough Walmart-specific training data to meaningfully outperform manual rule-based bidding.
• Plan Q4 Walmart Connect budgets now. Multiple agency buyers are reporting that Walmart’s ad inventory in October and November is booking out faster than in any prior year, with some premium placements already reserved through managed service commitments.

The broader takeaway for marketplace operators is that U.S. retail media is entering a genuinely competitive era. For the first time since Amazon built its advertising business into a $50 billion annual machine, a domestic rival has the data infrastructure, physical footprint, and seller base to credibly compete for discretionary ad budgets. Whether Walmart Connect sustains a 40% growth rate through 2027 remains to be seen — but sellers who ignore the channel through the second half of 2026 are almost certainly leaving profitable impressions on the table.