Walmart has rolled out a major change to its retail media offerings: brands can now bid on competitor brands’ keywords for sponsored products, display and video ads. Brands will have the first 2 positions on top of search reserved for their items, but competitors can claim other available sponsored spots if they outbid.
What's the takeaway for brands selling at Walmart? Early adopters of conquesting will now have more ways than ever to win buyers, but brands that fail to adapt risk losing a substantial chunk of their market share that could be difficult to regain.
Below, we'll lay out the implications of Walmart introducing conquesting. We'll also demonstrate why digital shelf signals are the key to an effective and budget-conscious retail media strategy.
An example of brand term targeting at Walmart: Violife cream cheese is buying sponsored search placements for "grassland cream cheese"
The same media budget won’t go as far as it used to
Until now, brands only needed to worry about budgeting for competitive bidding on generic keywords – like “chips” or “shampoo.” Now, branded terms like “Lays chips” or “Head and shoulders” are fair game for competitors to bid on. Brands should expect a long-term increase in cost per click (CPC) for their brand terms.
Rising retail media costs makes it more critical than ever to have smarter retail media strategies that incorporate digital shelf signals to maximize return.
Digital shelf-driven media buying is more essential and powerful than ever
Consumers will switch to your brand if they see your products at the right moment. When manufacturing struggles forced Huy Fong sriracha sauce off the shelves for months, other brands saw staggering sales increases of up to 374% year on year.
The fact is, with our research showing that 1 in 5 competitor products are out of stock at any given time, similar opportunities arise every day on a smaller scale – but only for brands equipped with the tools to quickly identify out of stock competitors and target them. And with Walmart enabling conquesting, brands can now automatically increase media buying for competitors’ brand terms as soon as they go out of stock. Accurate, daily digital shelf signals are now more powerful than ever before for brands trying to increase market share.
Our Shelf Intelligent Media integration with Skai and Pacvue has enabled brands like Philadelphia Cream Cheese to capitalize on these daily opportunities by automatically increasing media bidding when competitors are out of stock, leading to significant uplift in retail media effectiveness:
It’s important to remember that once you start conquesting competitors, they’re more likely to target your products in return. A successful conquesting strategy isn’t just offense – it’s about defense and tactical budgeting.
Brands need more tactical strategies and budgeting for Walmart media
The first step to defending your brand from conquesting is tracking. It’s critical to be aware when competitors start bidding on your brand terms, but it’s also important to know when your products are vulnerable to conquesting in the near future due to price competition or availability issues.
Alerts allow you to notify sales teams to take the appropriate actions to defend your products. But you’ll also want to track shifts in the volume of competitors conquesting your products over time.
This view is critical to informing brands’ higher-level media strategy and helping them get ahead of any long term threats to market share. If competitors are increasing their conquesting of your brand, expect your market share to erode too unless you take action.
The second step in defending your brand is strategic budgeting.
With increased costs and inflation, brands are under even more pressure to make their media budgets work harder than ever. While conquesting may typically be a slower ramp up, CPGs have many tentpoles in Q1 that may accelerate the rise in brand CPCs (Super Bowl, Easter, Spring cleaning, etc) to maintain market share.
As a result, brand budgets won’t go as far as before. Leveraging Shelf Intelligent Media’s brand signals means you can automate against Buy Box status and only serve ads when you’re winning the buy box.
For brands focused on driving new to brand buyers, expect to pay a premium when conquesting with a potentially unprofitable ROAS, but nearly all sales will be new to brand (NTB). In order to help your conquesting work harder, be more aggressive when your competitors’ inventory health is poor. Creating automated actions in Skai or Pacvue with Shelf Intelligent Media will help you scale & conquest with precision.
Different retailers require different media strategies
Conquesting isn’t a new concept, and many brands have developed strategies for brand defense and offense on retailers like Amazon. But every retailer is different, and brands will need to track how conquesting behaviors develop on Walmart over the next several months.
For one thing, Walmart has positioned itself as the best retailer for price-sensitive customers, meaning that brands may have the most success targeting competitors based on price changes that favor their products.
Consumer behaviors are also different across retailers when it comes to search. Within the same category, brands will find that an optimized search strategy prioritizes different keywords at Walmart vs. Amazon, as seen in the example below:
Don’t pay for uplift you can achieve organically
As conquesting begins to claim a larger share of brand budgets, remember that getting into a bidding war with competitors isn’t the only option. Brands should also ensure they’re taking full advantage of opportunities to boost their organic page 1 share on key brand terms.
Here are some free Profitero resources to help you:
Verify that your content meets retailer requirements and falls within the benchmark range for products that rank highly in search (see our Page 1 Intelligence Reports for retailer and category-specific insights).
Leverage retailer-specific insights such as our Decoding Walmart report to understand which assortment & content levers really drive sales at Walmart. Sales performance feeds into better search performance, creating a virtuous cycle that can help protect your brand from easy conquesting by competitors.
Speed is critical
The sooner brands adapt their Walmart strategies, the less likely they are to lose market share to a more agile competitor.
Leading brands recognize competitor conquesting as a best practice in their search and media strategy. Many of our Profitero customers’ retail media teams are actively testing conquesting campaigns on Walmart. In fact, having Profitero’s Walmart competitor data integrated with their bid management platforms means they can launch these campaigns with Shelf Intelligent Media automated actions from day one.
Competitor conquesting can be a good tactic to work into your retail media strategy, especially if you’re a smaller brand challenger taking on a larger, more recognized player. Set aside a small amount of your budget for conquesting competitors and defending your own brand (as a test & learn) but don’t get too distracted. It’s still important to invest the majority of your budget on ranking for important category terms where shoppers are still undecided about which brand to choose.
To learn more about how Shelf Intelligent Media works or to request a demo, click here.