Walmart's online Ad revenue could soar if its plan to acquire TikTok goes through
Reportedly Walmart Inc could turn into an online advertising leader if its plan to acquire popular short-form video app TikTok goes through, analysts said on Friday. The proposed purchase, in partnership with microsoft Corp, would allow the world's largest retailer to quickly compete with amazon, facebook and google for eyeballs on social media, reaching customers across virtual and physical sales channels.
Meanwhile TikTok is up for sale as the Chinese-owned company is under fire from the trump administration as a potential national security risk due to the vast amount of private data the app is compiling on US consumers. Walmart, which pitched its ad business to large consumer goods companies and advertising firms for the first time last year, said on thursday it was "confident" it could meet US TikTok users' expectations and satisfy US regulators' concerns.
TikTok owner ByteDance aims to ink a deal by september 15, people familiar with the matter told Reuters on Thursday. "Walmart is going to see a very quick rise in ad spend" if its bid succeeds, said Scott Smigler, president of e-commerce marketing agency Exclusive Concepts. " Last week, Walmart posted its biggest-ever quarterly growth in online sales, as the unprecedented spike in demand seen by big-box retailers at the peak of the coronavirus lockdowns has remained strong even as restrictions ease. Walmart does not break out revenue from sponsored ads for products sold on its website. But online ads yield much higher margins than product sales, and ad revenue is growing as the retailer boosts investments in the area.