I think we are going to get started here. Good morning. My name is Kate McShane. I am the Hardlines, Broadlines Analyst at Goldman Sachs, and we are very happy to be at the Goldman Sachs Communacopia + Technology Conference. It is my pleasure to introduce Walmart and moderate today's fireside chat. Today we have with us Ryan Mayward, Senior Vice President and General Manager of Walmart Connect U.S. Ryan joined Walmart in 2022, having previously served as Vice President of Ad Sales at Instacart, and prior to that, as Sales Director at Amazon. Ryan, thank you for being with us today.
Thanks for having me.
I thought it might be useful just because, again, Walmart Connect, I feel like we are all kind of getting educated on what Walmart Connect does and its role at Walmart. Could you tell us a little bit about your current role and responsibilities at the business?
Of course. Yeah, happy to. I joined the company about 4 years ago after a fairly long career in online advertising and a couple of stops between Amazon and Instacart. I am the General Manager of Walmart Connect, which means I run the business without product and technology. Those roll up to global leaders. I started in sales at Walmart Connect and moved into the GM role about eight or nine months ago.
Great. How has your prior experience prepared you for the role that you have now, and what is your approach in growing this platform?
Yeah. Well, it's funny, I started my career in this city 27 years ago. I just sort of pieced that together this morning as I was thinking about our chat. I've had a few experiences that really informed how I approach the business today. Many years ago, I worked at a company called Tacoda in the '05, '06 timeframe that got bought by AOL, and that was an early behavioral targeting ad network, which really informed how I thought about from the early days before DSPs, before retail media. I thought about using data to better address customers with ads. Building personas and profiles and doing things like personalization. Spent some time at NBCUniversal, where I really learned the TV business. Funny, I thought I left that behind me, and then all the retailers decided, or the largest retailers decided to get into the TV business.
I dusted off that knowledge and applied it here. Then joined Amazon in 2012, just as the ad business was getting started, and ran their DSP business for about nine years. That's been extremely helpful in my experience here at Walmart, where we have a sizable offsite business, a lot of DSP partnerships. I think that retail media is maybe a label that is less apt at describing the largest players in the retail space or the largest retailers that have advertising businesses. In part because the growth of the offsite business at a couple of these retailers, ours included. Which I'm sure we'll get into.
Yeah. No, we're definitely going to talk about DSPs and TVs a little bit later on. But just given that the business has changed a lot in these last few years, maybe could you talk specifically about the evolution of retail media at Walmart?
Of course. I'd say that over the last three or four years, we've really undertaken the publisher to platform evolution. When I started at the company, we very much behaved like a premium publisher. We offered advertisers, a small number of large advertisers, adjacency to the area and the app or the website where we were promoting holiday shopping moments, like back to school or Halloween or holiday baking or Black Friday, Cyber Monday. Selling the sponsorship offering. We also had a nascent search business at the same time. Most of the business was managed service. That is to say, we did the work for the advertiser. That's fine when you have a few hundred large brands that comprise most of your ad revenue.
As the marketplace started to take shape and we saw an opportunity to work with thousands and tens of thousands of advertisers, we knew that was the opportunity to build the performance advertising machine. The easy to buy ad platform that delivers a clear, measurable ROI, and can scale. It can accommodate any number of advertisers and is as easy to use for a small brand that might spend $1,000 a month as a large brand would want to spend $10 million a month. It works equally well. Building out a performance advertising platform, self-service, API enabled, building an ecosystem of service providers around us, is the mindset that's informed all of our decisions in the last couple of years, in terms of how we approach our partnerships with social platforms, how we're entering the CTV space.
It was really the basis for the rationale for the VIZIO acquisition, and so this platform evolution is really where we're at now.
Great. With regards to just how competitive the retail media space has become, can you maybe talk to us about how you think about acquiring the retail media dollars and what differentiates Walmart's advertising business from others?
Yeah. I just think across the retail landscape, if we just look over the last 20 years of growth and evolution in the broader digital media business, what do we see? What are the characteristics that the largest ad platforms in the U.S., and really in the world outside of China, have? They effectively reach every customer in the country in which they operate. They invest heavily in earning more and more of those customers' attention. They are easy to buy. It is as easy for a small advertiser to spend a small amount monthly as it is a big brand to spend hundreds of millions of dollars. There is a clear ROI component. They can see what they are getting for their ad investment. I think that those qualities describe a couple of the retailers in the retail media space.
One that has been around for a long time and business that is over 15 years, and us, and we are newer at this. We are about six years into our journey. I think that is the reason why much of the retail budgets are consumed by two companies, with one owning a disproportionate share of that revenue. I think that the rest of the retailers struggle with some aspect of that playbook, those qualities that the largest ad businesses have. Maybe they are a regional retailer and they struggle with reach, or they are specialty retail and they struggle with engagement. They do not have frequency of purchase. Maybe they are running their business on third-party technology and they are not easy to buy or struggling with proof of performance. I do not see this dynamic changing much in the near term.
I do think that as the top retailers in the world who have advertising businesses that look more like the large ad platforms expand their capabilities, the retail media terminology kind of becomes less and less applicable over time. That is really describing where we are now and our plans for the future.
Historically, too, I think within the timeline, you have seen a lot more engagement on the retail media platform from 1P and bigger advertisers. In recent quarters, you have seen stronger engagement in advertising from the Marketplace sellers.
Yeah.
So we wondered if you could maybe, again, walk us through a little bit of the evolution of that.
Sure.
What you are offering to the Marketplace sellers, and how do you think about the relationship between Marketplace and advertising?
Yeah, the relationship is symbiotic. The more Marketplace sellers, the bigger our Marketplace becomes, the larger our advertising business will be. The more sellers that we have, the more assortment, assuming they bring their full catalog. The more assortment we have, the more customer attention, the more GMV we will generate, and the more competition there will be for those customers' attention. I think that that competition will play out in two ways across the Marketplace. Sellers will compete on retail fundamentals, having the lowest possible price, having the fastest shipping speed, having great ratings and reviews, great content on their item detail pages. The other way that they will compete is in advertising, and that will primarily show up in paid search. So much of our growth has been driven by the emergence of Marketplace over the last several years.
Again, if we look at the shape of the revenue at the top ad platforms in the U.S., we see that, let's call it 70-ish percent of, say, a Google or a Meta's business might be mid-market and SMB business. That's a great spot to be in because of the diversity of the advertisers. That really insulates them from any sort of secular headwinds in any one industry like automotive or QSR or something like that. Marketplace is providing us with that diversity and helping us spread out the ad revenue across a much larger base of advertisers and help us grow in a more stable fashion.
One thing that you mentioned in the very beginning comments were just the opportunities in TV. You've made two acquisitions. I think maybe we'll start backwards if that's okay. We'll start with the VIZIO acquisition first. You just announced that you completed the acquisition of VIZIO on August 4th, and it's a self-service streaming TV advertising platform. How does this platform complement the business you just kind of walked through, and how do you expect the acquisition to impact your CTV initiatives?
Yeah. We're excited about the VIZIO acquisition. It closed just six or so weeks ago. If we look at the advertising channels that small businesses, particularly local small businesses, had 25 years ago, it was the local variations of print and radio and TV. The search and social platforms came along and did a great job of rolling up that SMB demand, those dollars. We see an opportunity to bring the small advertiser, the local advertiser, back into TV. I actually think that as TV has grown over the last 10 or so years, the barrier to entry about it actually gotten higher as the broadcasters focus more on larger and larger advertisers, knowing that they lost most of that small business share to the digital ad platforms.
I think the DSPs that have facilitated the migration of budgets from linear to CTV have also focused on the large advertiser use case. We see a big opportunity in smaller advertisers. VIZIO is great at that. What they've done is built a campaign management experience that would be familiar to a small advertiser that works with a search or social platform. Easy campaign set up, goal-based orientation, automated optimization, clear measurement. We think that that's a winning formula for bringing smaller advertisers back to TV. We see that their models, their optimization model, in its own right, is very strong. We're excited to see what they can do when they train their optimization model on Walmart data. We're excited to introduce third-party sellers that have never bought CTV to VIZIO. That'll be incremental demand for them. We're excited to aim VIZIO's demand at Vizio supply.
VIZIO had really started acquiring supply directly from broadcasters. More recently, they'd gotten around to integrating with the devices themselves. They hadn't gotten to VIZIO just yet, or they had right before the acquisition. We'll get that up and running and VIZIO demand will run on VIZIO supply. That'll be incremental demand for the VIZIO business. There's a lot of ways that VIZIO plugs into Walmart Connect.
Yeah. Then, again, I wasn't sure if VIZIO should come first or VIZIO, but that does dovetail into just backing into what VIZIO
Yeah.
is and that acquisition that you made a year and a half ago now. CTV, but just what are the capabilities? What milestones have you reached with that, and what's still to come?
Well, from an advertising perspective, I think the first order of business after we closed the acquisition was enable Walmart audience targeting and measurement on VIZIO inventory. We did that last year. This year is the first full year we're offering that to Walmart Connect advertisers. The uptake has been really strong, particularly across big CPG advertisers who were not VIZIO's biggest advertisers before the acquisition. So we're happy with that. We're happy with the ROI that VIZIO inventory is delivering with our data, as well as the ease of use or the ease of buying VIZIO inventory with Walmart data. What we're really focused on right now is driving reach. In TV, reach equals revenue. We're driving reach for VIZIO by sorting more VIZIO TVs, but also by putting the VIZIO smart TV operating system on our private label TVs, the onn brand.
The combination of those things has made the VIZIO OS the number one smart TV operating system in the U.S. in the first half of this year. That's really going to help the big brands that we work with derive more value from VIZIO when they reach more and more U.S. households, and then we can overlay Walmart data on that.
Other partnerships that you have announced recently include Magnite, which you mentioned before, enabling Yahoo DSP advertisers to activate campaigns on the VIZIO inventory. Your recent deal with Google, targeting Walmart shoppers on YouTube. What was your thought process behind the partnering with the external DSPs? Again, I think this is all about evolution and what we can see over time. What could that look like over time?
Yeah, I might separate the YouTube piece from the DSP, SSP work we did. I think that VIZIO has always been easy to buy insofar as you could use any DSP to buy VIZIO inventory. The question is, how do we maintain VIZIO's ease of access while also making Walmart data available on VIZIO inventory? We chose Magnite, and Magnite is the ad server for VIZIO, and it is the top SSP partner of theirs. We chose Magnite as sort of the central place where we will integrate Walmart Connect audiences and measurement capabilities. We will have our data there. We can maintain control while also allowing Yahoo, and soon DV360, to apply our data to VIZIO inventory. Large advertisers have a lot of strong feelings about which DSP they want to use or should use to buy CTV.
We need to work with multiple large DSPs to maximize the VIZIO opportunity. So that rationalizes the work with Yahoo and Magnite. I think with YouTube, we want to be where Walmart customers are spending their time, where are they engaged across the internet outside of a shopping environment. We have already established partnerships with Meta and TikTok. YouTube is a place that consumes a ton of online engagement. So we have done a partnership with them where we are in a beta stage right now with advertisers. You can use Walmart data to target and measure campaigns on YouTube. That is really about going out and finding Walmart customers where they are spending their time and allowing brands to do better targeting and measurement in those places, which is a much larger opportunity for us than solely focusing on monetizing owned and operated inventory.
I guess just as a follow-up question to that then, it is really just now, if you are just in the beta stage, especially with the YouTube DSP, it is just about figuring that out over time.
Yeah. It is about making the campaign management workflow self-service. Often when we will launch a new partnership with a big ad platform like a Meta or a TikTok or YouTube, it will be a managed service offering a closed beta while we figure things out with the partner in terms of how to make it easy to buy in their self-service campaign interface. That is what we are doing with YouTube right now, which is why I would characterize it as like a beta period.
One question that we do get a lot is about the AI impact and the effect of agentic commerce on Walmart's advertising business. We wondered if you could maybe, again, it is early.
Yeah.
But where you kind of see things moving when it comes to advertising in the more agentic commerce world.
Yeah. It is early and relatively small, but we are happy to partner with Google and OpenAI and enable the discovery of Walmart products in their agentic shopping interfaces. We are happy to acquire customers through those channels and drive discovery of our products. Maybe we are building relationships with new customers who ultimately check out through clearly a Walmart checkout experience. But it is small, and as those companies figure out how they want to drive more shopping volume and engage customers more deeply in a shopping journey, we are investing in our own shopping agent, which we call Sparky, and we are really happy with how Walmart customers are using Sparky. It has grown a lot. Our weekly active customers have doubled year-over-year. It is growing fast quarter-to-quarter, 60% growth quarter-to-quarter in terms of weekly active use of Sparky. Customers are using Sparky for more considered purchases.
Maybe a party planning use case is a good way to describe it. We were chatting earlier, tailgating for college football. You might not know what you want to buy to host that party. You give Sparky a lot of information about the shopping occasion, which is gold for us in terms of delivering relevant results. Sparky provides all of the items you might need to host a tailgate party. I think that's also what's driving the average order value in Sparky, which is 40% higher than non-Sparky shopping trips. As the broader agentic shopping landscape evolves and takes shape, we're there, and we're investing heavily in our own agent.
How would you maybe kind of close the loop on that? How customers find come back to maybe walmart.com in an OpenAI or agentic commerce environment?
I think we're giving customers a lot of reasons to engage with us digitally, whether it's giving us their mobile phone numbers so we can text them a receipt when they do self-checkout, or scheduling an appointment with our auto care center in the Walmart shopping app. Or walking into a Walmart store and opening up the app and using store mode to navigate the aisles or to pay with the credit card they've got on file with their app. There are lots of reasons customers will have digital touchpoints with Walmart, and we're giving them more and more reasons and making those high utility reasons. We don't have any concerns about ongoing digital engagement in shopping with Walmart, even though our products, particularly for single item shopping trips, are out there in other agentic experiences.
Maybe if we could walk back to something you said before just about measurement. Could you maybe talk a little bit about how Walmart is measuring the success of an ad campaign and how it differs between online versus maybe what you're doing in the stores?
Sure. Yeah. I would say that the breadth and depth of our measurement capabilities gives us the luxury of going to an advertiser and starting with, what is your core business goal? Is your business goal to acquire new customers for your brand, to drive household penetration, to reactivate customers who used to buy your brand but maybe switched to a competitor? Or maybe you want to build bigger baskets through meal solutions or a beauty regimen or home cleaning regimen. We have tactics that can drive those outcomes, and we have metrics that can measure whether those things are all happening. That puts us in a very strong position to offer a solution to a brand rather than sell ads and rely on, say, third-party measurement capabilities. I think the core question that brands are asking us is, what is the incrementality of my investment within Walmart Connect?
Are the ads causing sales that wouldn't have happened if I wasn't investing in advertising? We answer that question, too. We have multiple ways of measuring sales lift for display and video and search, and that's particularly launching incrementality for search about a year ago has been hugely helpful in proving ROI to brands. I think the journey they're on next is how do they make sure that the signal they're seeing from our reporting shows up in their own internal ROI models. They're evolving their media mix models. There's lots of companies out there that have AI in the name that are helping brands build more agile MMMs that don't have to do it once or twice a year.
We're also starting to plug into those to help brands understand that the results they're seeing from our reporting are also showing up in their own ROI model, which is really just about building trust and helping brands continue to grow on an already large base of ad spend.
We've talked a lot about the digital advertising online, but what about every opportunity that could be in the store?
Yeah.
We know digital screens is part of it, but what else can you tell us about advertising in store?
Well, what I didn't answer in your measurement question is in-store attribution. I kind of forget about that because it all happens automatically. Online ads drive sales in our app and in our store, and we always measure both for every campaign. It's just built into the system. With in-store advertising, we do see a meaningful opportunity there to have more engaging screens throughout the store. We've been experimenting with screens around the perimeter of the store, the TV wall, deli and bakery screens, and those have been effective for food and for electronics or electronics-adjacent categories. But really where we have the space and where we have a lot of traffic that we haven't taken advantage of with screens are in the aisles in the middle of the store.
We're testing in certain stores now end-of-aisle screens that are inventory and price aware that will show sponsored messages to drive customers down those aisles, particularly in food and consumables. So we're really excited about using the store and introducing new advertising surfaces that are additive to the customer experience and applying our attribution to in-store assets as well as ads that you see online.
Great. E-commerce profitability is also a big investor focus, and Walmart U.S. continues to benefit from the strong e-commerce growth and the business turned profitable in the first quarter of 2025. Can you maybe talk about the interplay between the growth of e-commerce and advertising and how advertising has contributed to this better e-commerce profitability?
Yeah. I would characterize it similar to how I talk about marketplace.
The relationship between the growth of e-commerce and the growth of advertising have a direct relationship. They are symbiotic in nature. The more Walmart customers who are addressable online, the bigger our advertising business will be, the more e-commerce GMV, the faster our advertising business will grow as well. We have a great high margin advertising business, over 70% margins compared to five-ish percent for the core retail business. This profitability is incremental to Walmart. I think some of the retailers out there are growing their advertising businesses through a pocket shifting, getting a break in one sort of trade investment area in exchange for investment in ads. That is not something that we are favorable on, which we do not do that at all. The profit from the business is purely incremental to Walmart. We see a lot of headroom to grow this business.
We have the opportunity to advertise in the Walmart shopping app. We have all these other surface areas across social and CTV that I mentioned. VIZIO has been a platform that has introduced us to advertisers that do not sell products at Walmart, as has VIZIO. So with VIZIO, we have small advertisers that do not sell products at Walmart, and with VIZIO, we have big ones. We would call those non-endemic advertisers. That is a whole new addressable advertiser universe for us to work with. I do think that there is a clear connection between e-com GMV growth and ads growth, but ads growth can also happen outside of the dynamics of our e-commerce business. I think that is an important insight for understanding the long-term growth potential of Walmart Connect.
The advertisers that do not sell at Walmart, we are at the very beginning stages, it sounds like. Could you maybe give a couple of examples of what that looks like and-
Yeah. Insurance, financial services, quick serve restaurants, entertainment companies buying TV ads from VIZIO. Local advertisers, a local car dealership, a local restaurant chain buying CTV ads from VIZIO. We should acquire a third company that starts with the letter V. You are going to torture me up here. Those are a couple of examples where they are CTV-centric. Actually, before we bought VIZIO, we had launched non-endemic advertising at Walmart Connect. Brands that do not sell products from us could use Walmart data on the Walmart DSP, so running offsite. Then also, in the last year and a half, we have opened up ad placements in the Walmart shopping app where non-endemic advertisers can put their placements for their ads, rather. So think about the post-checkout experience or when you are going to a Walmart for a pickup order and you are sitting in your car and you are looking at your app.
There are ads there which say, "Hey, go check out McDonald's or Burger King." Contextually relevant ads that are for experiences outside the Walmart environment. Those are a few examples of how we have experimented with and grown non-endemics. But VIZIO and VIZIO will be accelerants for that.
Great. Sam's Club is obviously part of Walmart and with the recent rebranding of the member access platform to Sam's Club Connect, how do you think about the relationship between the advertising business of Walmart U.S., Walmart International, and Sam's Club now over time when considering the growth of global brands?
Yeah. Well, those are fairly early businesses, the international businesses and even Sam's. When you are getting started and the advertising business lives in different segments around the company, you are left to your own devices to figure out how to do it. Sam's and our international markets have taken different paths, used different third-party vendors. So what we are doing today is the unsexy work of unifying each market and each retail business on a common ad tech stack so that everybody can take advantage of the features and functionality, the advertiser capabilities that we have built for advertisers in the U.S. That is a big investment that is underway now. As that work comes to completion, it just means that those advertising businesses will take off.
Their data will be used more effectively. Their placements and their apps will be used more effectively. And they will have a longer growth runway.
I do think that there's also an opportunity to work with global brands. I've worked at companies before where I had an international arena and we had big brands that operated in every country in which we operated, and they wanted things like joint business plans that covered every market, common commercial benefits. I think that there's an opportunity. We're not there yet. There's an opportunity to do that down the line, which is just another way of becoming a more strategic partner to big brands and deepening their relationship. I think that the tech work we're doing now lays the foundation for growth in each market independent of the U.S., but also, it will be enhanced with global relationships that might originate from the U.S. and then benefit each local market.
Great. In our last couple of minutes here, we've heard a lot of great stuff today. It still sounds like there's so much to come. Just over the next couple of years, what excites you most about Walmart's advertising business?
I think the size of the opportunity we are helping brands of all sizes, large and small, in all industries grow. Walmart Connect will continue to grow, and we'll do that by engaging our customers in a shopping environment in-store, online. Also engaging Walmart customers, which is really another way of saying engaging U.S. consumers, but through the lens of what we know about what they shop for and buy from Walmart, engaging them in the places where they choose to spend time online, whether that's a social environment, whether it's watching TV, whether it's short-form video on their phone or in the living room. We are building out the capabilities to be in all those places. We are in all of those places at an early stage of maturity.
As those capabilities mature, our advertising business opportunity size will be much bigger than that which is enabled by the retail business. That's really the foundation for many years of growth. That's really what I'm excited about, is sort of really breaking out of the retail media mold and being an advertising business.
Great. Well, thank you so much for joining us today.
Thank you.
Thank you.
Appreciate it.