Retailing these days can be thought of as really just a two-horse race. In lane one is mighty Amazon (NASDAQ:AMZN). In the other is discount champion Walmart (NYSE:WMT). And while it may seem like AMZN has the upper hand, you can not count out WMT in the slightest. The world’s largest retailer continues to fight back in a big way and the tug of war between the two is shaping up to be a big battle.
The latest salvo from Walmart against Bezos’ baby is taking a very successful play out their own books and applying it against them. We’re talking about digital advertising.AMZN has already used digital advertising effectively and Walmart’s latest announcement to get into the game could put pressure on Amazon and ultimately cut some of those lucrative revenues. For investors in WMT, it just goes to show that the traditional retailer is adapting to the new environment with gusto.
Walmart Gets Serious About Digital Ads
We’ve talked before about how Amazon is effectively selling space on its website to advertisers. The quick gist that vendors bid to have their products show up alongside a related search term.
So, Proctor & Gamble (NYSE:PG) pays to have Tide products show up alongside the words “laundry detergent.” The beauty for Amazon is that it doesn’t matter if you buy Tide or Arm & Hammer, it still gets a sale and makes money on the sponsored ad.