Walmart Connect recently announced impactful changes to their ad-serving criteria for search and browse in-grid placements, popular Sponsored Products ad types. The new, loosened criteria provides increased opportunities for brands of all sizes to secure critical visibility in a growing sea of competition.
Top factors considered include the advertised item’s contextual relevance, historical performance, and how well it aligns with the customer’s search intent.
Search and Browse In-Grid Placements Criteria
Let’s take a closer look at the former criteria that had to be met to advertise through search and browse in-grid placements, the updated criteria, and why the increased flexibility matters…
High Organic Rankings No Longer Required
Before the recent update, Walmart required that an item be organically ranked within the top 128 in-grid results to be eligible for these ad types. That requirement has now been lifted, meaning you can advertise relevant items regardless of where they fall within Walmart’s organic rankings for a given search.
Why This Matters
The primary benefits of advertising are increased reach and visibility, but many brands were ‘boxed out’ of advertising through search and browse in-grid placements because they weren’t yet ranking high enough organically to boost their efforts through advertising.
Among those who felt the greatest impact were small and medium-sized businesses, but even household name brands don’t always secure a top 128 position for all their products, particularly new launches.
With this organic ranking requirement lifted, all relevant products have a chance to be seen. Whether you’re an established brand that wants to push a hot new product, or a younger brand trying to get more eyeballs on something you know consumers will love (if they just knew about it!), the option is now available.
Ad Placement Flexibility
Walmart’s former advertising criteria required that search and browse in-grid ads appear in a slot equal to, or higher than, the position the advertised product was ranking organically. The updated criteria allows for the ad to show anywhere within the results—in a slot equal to, higher than, or lower than the organic listing.
Why This Matters
We anticipate this change will have the biggest impact in instances where the advertised product is already ranking high in the organic results, opening up additional inventory by allowing ads to serve below the organic listing.
Now, consumers will have a chance to see that product again as they scroll further down the results page, and are closer to choosing which product or products they’ll click on to learn more, or add to their cart.
This change can also improve click-spend efficiency given the organic listing is now able to display higher than the advertised item. This enables brands to more confidently invest in advertising without worrying they’re standing in their own way of earning organic clicks, as the consumer can now have an opportunity to convert on the organic listing prior to even seeing the paid placement (in some instances).
Product Type Flexibility
The former criteria for search and browse in-grid placements required that the product you wanted to advertise was the same product type as at least one organically ranking (non-sponsored) product within the first results page for a given search. Walmart’s update now only requires that the advertised product is relevant to the search query, regardless of whether another product of that specific type is on the first page of search results.
Why This Matters
Simply put, not all searches are created equal, and some have much more room for nuance and varied search intent than others. By removing the same product type requirement, Walmart is giving advertisers increased opportunities for discovery, while still maintaining a positive user experience by requiring general relevance.
This benefits shoppers by presenting them with options they might not have otherwise discovered that do indeed fit their needs, even if they don’t have an organically ranking counterpart by product type.
It also enables advertisers to promote complementary products that might interest the shopper. An example of this would be an ad for a coffee grinder being served in the in-grid search results for “whole coffee beans.”
“Walmart’s search relevancy enhancements help level the playing field for sellers of all sizes. Now that products don’t need to serve organically within the top 128 spots to be eligible, a large bucket of demand has been unlocked that can now be leveraged to drive both product and brand performance across highly competitive, highly visible verticals.”
— Mark Gray, Associate, Strategic Marketplace Services at Tinuiti
What isn’t changing?
Walmart’s search-relevancy enhancements are geared toward better answering for customer’s search intent, regardless of a given item’s organic performance, but certain existing criteria will still be in place:
- In order to be eligible for advertising, it is still required that the item be winning the Buy Box
- It is still necessary for the item to be the base item, published, and in stock
- Advertisers can still not bid on competitor keywords, or use negative keywords in their campaigns
- Suggested bids will still be provided
What’s Next: Walmart Advanced Second-Price Auction is Coming Soon
Hot on the heels of search-relevancy enhancements, Walmart Connect announced plans to switch to a second-price auction for Sponsored Products and Search Brand Amplifiers in coming months. Today, Walmart operates on a first-price auction.
First-price vs. Second-price Auctions: Advertiser Benefits
In a first-price auction, also known as a blind auction, advertisers submit their highest bid, or the highest price they’re willing to pay for an ad impression. This bid is submitted without any knowledge of how high or low other advertisers are simultaneously bidding for the same impression.
When an advertiser wins the bid in a first-price auction, they are charged whatever they submitted as their highest bid, regardless of the amount of the next-highest bid.
In a second-price auction—the model used by eBay and Amazon, among others—the highest relevant bidder is still the winner, but they may not have to pay the highest amount they were willing to pay. With this auction model, the winning bidder will often pay just slightly over (ex. $0.01) the next-best competitor’s bid.
In Walmart’s advanced second-price auction, the simplified “one penny more” rule will not be at play. Instead of only calculating the final price based on bid amounts, Walmart will also consider the strength of an item’s relevance for a given search.
- If the item with the winning bid is highly relevant for a query, the advertiser is likely to pay a lower cost than if they were the winning bid, but less relevant
- This price will still likely be less than their maximum bid, and may be higher than $.01 more than the next-highest bid. However, there is also a chance that it will be lower than the next-highest bidder’s maximum bid (ie. if the winning bidder’s product and/or keyword data is significantly more relevant than the next-highest bidder)
- This underscores the importance Walmart is placing on relevance, despite a relaxing of some of their more concrete rules. It also eliminates the fear and risk of overpaying, and can significantly reduce advertising costs
“I couldn’t be more excited for Walmart’s transition to a second price auction. This transition will result in a number of benefits, including less wasted media dollars, a better understanding of competitive bid levels, and an opportunity to scale performance while more effectively controlling return. Not only that, but this puts Walmart more in line with its industry peers, thus allowing for cross-channel strategies and tactics to better translate.”
— Stuart Clay, Associate Director of Strategic Marketplace Services at Tinuiti
Walmart will also determine the actual ad positioning based on product relevance, among other factors. If you haven’t already, it’s time to ensure you’ve fully-optimized your Walmart product listings. This will help improve your relevance, increase your chances of surfacing organically and through ads, and effectively secure the sale by providing shoppers with all the necessary information they need to confidently make a purchase.
The areas you’ll want to focus on include:
- Product title
- Product description & key product features
- Product categorization
- Ratings & reviews
The Walmart Train is Not Slowing Down
2021 and 2022 have been packed with game-changing, transformative shifts in Walmart advertising options and capabilities, and this exponential growth shows no signs of a slow-down any time soon.
From the launch of Walmart Display Self-Serve Advertising, to building their very own Walmart DSP in partnership with The Trade Desk, the retail giant has been working hard to expand their advertising options to accommodate brands of all sizes and budgets. The new search-relevancy enhancements, and upcoming second-price auction, build on those investments, making it easier than ever to harness Walmart’s wealth of first-party data to reach the right audiences, at the right time, with the right ad.