Walmart, the retail giant, has recently announced its plans to acquire Vizio, a well-known TV brand, for a staggering $2.3 billion. While Vizio is primarily recognized for its affordable televisions, Walmart’s interest lies in the company’s advertising business and access to user data. This strategic move by Walmart aims to bolster its Walmart Connect advertising business and tap into the lucrative world of targeted advertising.
Vizio’s advertising arm, known as Platform+, boasts over 500 direct advertiser relationships, including several Fortune 500 companies. With the acquisition, Walmart hopes to leverage this existing network and expand its appeal to advertisers. Additionally, Walmart’s high-volume sales of TVs will further fuel its advertising efforts. The retail giant is keen on making Walmart Connect a top-10 advertising business, joining the ranks of industry giants like Alphabet, Amazon, and Meta.
One of the key advantages of acquiring Vizio is the access to valuable user data. By combining the data gathered from Vizio TVs with the shopper data it already possesses, Walmart can offer targeted ad space to advertisers. This data will also help advertisers track the effectiveness of their ads. As vendors seek new ways to monetize already-purchased TVs, incorporating ads into TV operating systems and utilizing customer data has become increasingly common. Companies like Vizio, Amazon, and LG are capitalizing on this trend, and Walmart aims to do the same.
Seth Dallaire, Walmart US’s EVP and CRO who will oversee Vizio post-acquisition, highlights the shift in the TV industry from hardware to software. Smart TVs and streaming have transformed the landscape, making it crucial for companies to focus on software development rather than just hardware sales. Vizio currently holds an 8 percent market share in the connected TV operating system market, trailing behind Roku OS, which has a 25 percent share. Although Walmart’s own “onn.” TVs feature Roku OS, the retail giant does not own Roku.
While the acquisition presents exciting opportunities for Walmart’s advertising business, there are concerns about the potential drawbacks for Vizio TV users. As Vizio’s primary focus has been selling ads rather than TVs, the acquisition could shift the company’s attention away from improving its hardware. This could result in a TV experience that is overly saturated with ads, potentially detracting from the quality and user experience. While some consumers may be willing to compromise on features and image quality to save money, an excessive amount of ads and intrusive viewer tracking may deter others. As Vizio becomes part of a conglomerate eager to expand its ad business, there is a possibility that the ad experience on Vizio TVs could worsen.
The acquisition of Vizio by Walmart is expected to be finalized by the summer, pending regulatory clearance and other closing conditions. Walmart’s move into the advertising space through this acquisition demonstrates its ambition to diversify its revenue streams and compete with industry leaders. As the retail landscape continues to evolve, Walmart is positioning itself to be a formidable player in the world of targeted advertising, leveraging Vizio’s advertising business and user data to its advantage.
