• DE&I Commitment
  • Careers
  • SIGN IN
  • Book a Meeting
    Book a Meeting
  • Company
    Learn a little more about us, our values, and our team
    Our Values
    We don't just talk the talk; we live by our core values
    About Us
    Empowering brands to realize their potential with data, insights, and technology
    Leadership
    Meet our leadership team
    Secure Data Architecture
    Our promise of data security and privacy. We keep your data safe from publishers, competitors and bad actors
    Corporate Social Responsibility
    We are committed to making a positive impact on our communities and our planet
  • Platform
    Plan, manage, optimize, and measure your campaigns with our omnichannel platform
    Omnichannel Advertising
    A platform that connects all walled garden media for more effective campaigns
    Data Connectivity
    Make data-driven decisions as you plan and strategize
    Product Capabilities
    Take your campaigns to the next level by enhancing your platform capabilities
    See the industries we serve
    Learn how our customizable solutions can help with your unique needs
    Explore our partner integrations
    See the media, retailer, and data partners we work with
  • Case Studies
  • News and Events
    Check out recent announcements and see what we’re up to
    Newsroom
    Check out our recent media mentions and announcements
    Events
    Join us for our next conference or webinar
    Omnichannel platform launch
    Read the press release to see how we're helping marketers win the walled gardens
    Cannes Lions 2023
    Don't miss your chance to meet with Skai leadership in Cannes
  • Resources
    From new releases, to industry trends and best practices, Skai has you covered
    Marketer Insights
    Read the latest blog posts and thought leadership from Skai and other industry experts
    Skai Research
    Explore our studies, reports and whitepapers so you can keep up on the latest industry trends
    Quarterly Trends Report
    See the key digital marketing trends from Q1 2023
    The Breakthrough
    The only resource hub built for marketers in the new era of omnichannel
Back to Blog

Walmart Connect CPCs Down 19% After Last Week’s Second-Price Advanced Auction Switch

Joshua Dreller, Sr. Director, Content Marketing @ Skai™

June  14, 2022
Walmart Connect advanced second-price auction

In last week’s Skai post, Walmart Connect’s Advanced Second-Price Auction Focused on Relevancy, we shared insights from a pivotal WMC article regarding several new announcements:

Most notably, though, was the launch of its advanced, second-price auction for Sponsored Products and Search Brand Amplifier to help give advertisers the confidence to bid their best, with a reduced risk of overpaying. 

“Combined with our recent search-relevancy enhancements, advanced second-price auction helps reduce advertisers’ risk of overpaying for cost-per-click bids, giving them the confidence to bid their best and putting Walmart advertising within reach for budgets of all sizes,” [wrote Walmart Connect’s, Dionne Resnik.]

This move to a second-price auction helps Walmart Connect’s program to be on par with other retailer publishers. 

That change went into effect last week.

Today, Skai’s Senior Director of Marketing Research, Chris Costello, checked in on aggregate campaign performance insights from our clients running advertising on Walmart Connect.

“When we looked across all Walmart activity hosted on the Skai platform before and after the implementation of the second-price auction policy on 6/6, we found that average cost-per-click decreased by 19%,” says Costello. “The daily average for the six days before the switch was $0.74, and the six days since was $0.60.”

Average Cost-Per-Click across Skai’s clients running on WMC before and after last week’s second-price auction shift

Why CPCs dropped in Walmart Connect’s advanced second-price auction 

We asked Skai’s Retail Media Industry Lead, Kevin Weiss, why second-price auctions are the modern-day standard for pay-per-click (PPC) media:

The amount an advertiser pays for a click is based on the market’s perceived value of that click. An auction is the best way to determine a click’s market value because it allows everyone in the market to state their perceived value in the form of a bid price. When you have a first-price auction, the market value of a click is more volatile. The difference in perceived market value between one advertiser and the next can be massive. 

Generally speaking, businesses don’t like volatility, and the same applies to advertising. When the same click costs X one day and 2X the next day, many advertisers will behave more conservatively by keeping their bid prices low and letting others deal with volatile costs. 

Second-price auctions, on the other hand, produce the most stable costs for an advertiser. In a second-price auction, the gap between the highest bid price and the next highest bid price is automatically eliminated. This is why we had high confidence that the initial impact after the WMC switch would be that average costs per click would go down—as the market value is now based on a combination of two bid prices instead of just one. 

This effect helps the average cost-per-click stabilize over time as advertisers zero in on each click’s market value and the corresponding price the market is willing to spend on it. Eventually, advertisers gain confidence in the more stable marketvalue of a click, allowing them to gradually increase their bid prices until it reaches the maximum market value. In the long-term, second-price auctions create a higher average cost-per-click than first-price auctions while also giving advertisers what they want (i.e., less volatility). 

Key Takeaways from the WMC advanced second-price auction shift

The second-price auction works in favor of advertisers. Walmart Connects switchover to the second-price auction model is the only time that we can remember at Skai of this happening. Generally, auction-based publishers either start this way or change to the second-price model during a major overhaul of their platform when many other variables are changed—a precise determination of its impact isn’t always clear. 

This 19% drop in ad CPCs shows that advertisers win in second-price auction models. 

As Weiss explains, advertisers base bid-to-value on factors. So if analysts or algorithms detect positive keyword performance, bids will likely go up. Marketers also have a familiar or comfortable maximum CPC for any particular program, so if their total CPCs start to go down, they may feel okay.

This is another signal of retail media’s maturation. As publishers launch in an emerging channel, standardization helps minimize its complexity, which reduces friction to quickly scale and drops barriers to attain positive performance. WMC’s shift to the second-price auction signals that retail media is becoming mature. 


To learn more about Walmart Connect’s second-price auction, please visit the Skai blog post, Walmart Connect’s Advanced Second-Price Auction Focused on Relevancy.

And, for all of your Walmart Connect needs, check out Skai’s Retail Media solution—schedule a quick demo to see all of our cutting-edge innovation for yourself.

Request a Demo of Skai

Related Posts

  • Hangry cat pet food; Walmart Connect pet food search.
    How Walmart Connect’s Advanced Second-Price Auction Focuses on Relevancy
    Read More
  • Mother’s Day 2022 Retail Insights from Walmart Connect
    Read More
  • Kroger Precision Marketing Announces Its Retail Media Partnership with Skai
    Read More
  • Woman sitting down at her desk browsing a retail fashion sale with her credit card in hand.
    Dive into the Retail Media Advertising FAQs
    Read More
  • street sign.
    The Skai 5: Five Growth Drivers for Retail Media Spending
    Read More
  • Consumers looking on their laptop at Walmart PPC ads.
    Walmart PPC: How to Get Started
    Read More
  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
  • Share via Email
  • Copy Link
    Copied!
Tags: Create, Data, Plan, Retail, Retail Media, Target, Walmart, xTLx

    Subscribe to Updates

    Media that matters.
    Marketing that works.
    © 2023 Kenshoo, Ltd. All Rights Reserved.
    Privacy Policy. Cookie Policy. Recruitment Privacy Policy.
    • Connected Strategy
      • Dynamic Marketing Mix
      • Budget Forecasting
      • Strategic Consulting
    • Connected Media
      • Overview
      • Retail Media
      • Paid Search
      • Paid Social
      • App Marketing
      • Auditing
      • Expert Services
    • Measurement
      • Incrementality
      • Experiments
      • Cross-Channel Attribution
    • Resources
      • Blog
      • Glossary
      • Case Studies
      • Training & Enablement
      • Developer Hub
      • The Breakthrough
    Privacy Preference

    We use cookies on our website. Some of them are essential, while others help us to improve this website and your experience.

    Privacy Preference

    Save All

    Save

    Accept Only Essential Cookies

    Manage Cookie Preferences

    Cookie Details Privacy Policy Imprint

    Privacy Preference

    Here you will find an overview of all cookies used. You can give your consent to whole categories or display further information and select certain cookies.

    Save All Save Accept Only Essential Cookies

    Back

    Privacy Preference

    Essential cookies enable basic functions and are necessary for the proper function of the website.

    Show Cookie Information Hide Cookie Information

    Name
    ProviderOwner of this website, Imprint
    PurposeSaves the visitors preferences selected in the Cookie Box of Borlabs Cookie.
    Host(s).skai.io, skai.io
    Cookie Nameborlabs-cookie
    Cookie Expiry1 Year
    Name
    ProviderOwner of this website
    PurposeThis cookie stores selections made by the user in the Accessibe tool in order to maintain those settings on future visits. These cookies help us make our website compliant with our obligations under US law.
    Privacy Policy https://accessibe.com/privacy-policy
    Cookie NameacsbState, acsbReset
    Cookie Expiryn/a
    Name
    ProviderOwner of this website
    Host(s)skai.io
    Cookie Namewordpress_sec_,wordpress_test_cookie,wp-postpass_*, wordpresspass_*, wordpressuser_*
    Cookie ExpirySession / 1 Year

    We use these cookies to enhance functionality and allow for personalisation, such as live chats, videos and the use of social media.

    Show Cookie Information Hide Cookie Information

    Accept
    Name
    ProviderOwner of this website
    Host(s).chilipiper.com, skai.chilipiper.com
    Cookie Namefs_uid, CHILI_PIPER_CLUSTER, guest-session, _sp_ses*, _sp_id*
    Cookie ExpirySession / 2 Years
    Accept
    Name
    ProviderOwner of this website
    Host(s).comeet.co, www.comeet.co
    Cookie Namevisid_incap_, nlbi_#######, incap_ses_, referrer22_00a, incap_ses_1364_2167377
    Cookie ExpirySession / 1 Year
    Accept
    Name
    ProviderOwner of this website
    Host(s)skai.io
    Cookie NamemoduleFormPardotDownload
    Cookie Expiry30 days

    Statistics cookies collect information anonymously. This information helps us to understand how our visitors use our website.

    Show Cookie Information Hide Cookie Information

    Accept
    Name
    ProviderGoogle Ireland Limited, Gordon House, Barrow Street, Dublin 4, Ireland
    PurposeCookie by Google used for website analytics. Generates statistical data on how the visitor uses the website.
    Privacy Policy https://policies.google.com/privacy?hl=en
    Cookie Name_ga, _ga_*, _gat,_gat_*,_gid, GOOGLE_ABUSE_EXEMPTION, AEC, __Secure-ENID, SOCS, CONSENT
    Cookie ExpirySession / 2 Years
    Accept
    Name
    ProviderHotjar Ltd., Dragonara Business Centre, 5th Floor, Dragonara Road, Paceville St Julian's STJ 3141 Malta
    PurposeHotjar is an user behavior analytic tool by Hotjar Ltd.. We use Hotjar to understand how users interact with our website.
    Privacy Policy https://www.hotjar.com/legal/policies/privacy/
    Host(s)*.hotjar.com
    Cookie Name_hjClosedSurveyInvites, _hjDonePolls, _hjMinimizedPolls, _hjDoneTestersWidgets, _hjIncludedInSample, _hjShownFeedbackMessage, _hjid, _hjRecordingLastActivity, hjTLDTest, _hjUserAttributesHash, _hjCachedUserAttributes, _hjLocalStorageTest, _hjptid, _hjSessionUser_2229986, _hjIncludedInPageviewSample, _hjIncludedInSessionSample, _hjAbsoluteSessionInProgress, _hjFirstSeen
    Cookie ExpirySession / 1 Year
    Accept
    Name
    ProviderOwner of this website
    PurposeVWO is AB Testing software that we'll use to test different elements of the website - form placement, nav, different page layouts, etc.
    Privacy Policy https://vwo.com/compliance/cookies-notice/
    Host(s).skai.io, dev.visualwebsiteoptimizer.com
    Cookie Name_vis_opt_exp_{CAMPAIGNID}_goal_{GOALID}, _vis_opt_test_cookie, _vis_opt_exp_{CAMPAIGNID}_combi, _vis_opt_exp_{CAMPAIGNID}_exclude, _vis_opt_exp_{CAMPAIGNID}_split, _vis_opt_s, _vis_opt_out, _vwo_uuid, _vwo_uuid_{CAMPAIGNID}, _vwo_ds, _vwo_sn, _vwo_uuid_v2, _vis_opt_exp_{CAMPAIGNID}_combi_choose, _vwo_referrer, _vwo, _vwo_global_opt_out, _vwo_ssm, uuid
    Cookie ExpirySession / 10 Years

    Marketing cookies are used by third-party advertisers or publishers to display personalized ads. They do this by tracking visitors across websites.

    Show Cookie Information Hide Cookie Information

    Accept
    Name
    ProviderLinkedin
    Cookie Namelidc, li_gc, lang, AnalyticsSyncHistory, UserMatchHistory, li_sugr, bcookie, TDCPM, TDID, bscookie, ln_or
    Cookie ExpirySession / 1 Year
    Accept
    Name
    ProviderSkai
    Cookie Nameken_gclid
    Accept
    Name
    Provider6sense
    Cookie Name_gd_session, _an_uid, _gd_visitor, _gd_svisitor, 6suuid
    Cookie ExpirySession / 400 Days
    Accept
    Name
    ProviderPardot
    PurposeCookie name associated with services from marketing automation and lead generation platform Pardot. The visitor value is the visitor_id in your Pardot account. This cookie is set for visitors by the Pardot tracking code.
    Host(s).pardot.com, pi.pardot.com, skai.io
    Cookie Namepardot, visitor_id*, lpv*
    Cookie ExpirySession / 10 Years
    Accept
    Name
    ProviderGoogle Ireland Limited, Gordon House, Barrow Street, Dublin 4, Ireland
    PurposeCookie by Google used for conversion tracking of Google Ads.
    Privacy Policy https://policies.google.com/privacy?hl=en
    Cookie NameIDE, 1P_JAR, NID, _gcl_au, OTZ, test_cookie
    Cookie ExpirySession / 400 Days
    Accept
    Name
    ProviderOwner of this website
    Cookie NamePHPSESSID, sid, okto-autoposter-XXX, oktgid, oktsid, oktlogid-XXX, oktolead-XXX-Email, oktolead-XXX-Company, oktolead-XXX-FirstName, oktolead-XXX-LastName, oktolead-XXX-Phone, oktolead-XXX-Country, oktolead-XXX-Url, oktolead-XXX-State, oktolead-XXX-Comment, optout
    Cookie ExpirySession / 2 Years
    Accept
    Name
    ProviderMeta Platforms Ireland Limited, 4 Grand Canal Square, Dublin 2, Ireland
    PurposeCookie by Facebook used for website analytics, ad targeting, and ad measurement.
    Privacy Policy https://www.facebook.com/policies/cookies
    Cookie Name_fbp,act,c_user,datr,fr,tr,m_pixel_ration,pl,presence,sb,spin,wd,xs
    Cookie ExpirySession / 1 Year

    Content from video platforms and social media platforms is blocked by default. If External Media cookies are accepted, access to those contents no longer requires manual consent.

    Show Cookie Information Hide Cookie Information

    Accept
    Name
    ProviderWistia
    Host(s).wistia.com
    Cookie Namecb_anonymous_id, _sp_ses.2b40, _li_dcdm_c, __hssrc, _gcl_au, _clsk, hubspotutk, _sp_id.2b40, __hssc, __hstc, _uetsid, _uetvid, _gid, _ga, _ga_GQR109DZ3Y, _lc2, fpi, _ex-pricing-cta, _fbp, cb_group_id, cb_user_id, _clck
    Cookie ExpirySession / 400 Days
    Accept
    Name
    ProviderMeta Platforms Ireland Limited, 4 Grand Canal Square, Dublin 2, Ireland
    PurposeUsed to unblock Instagram content.
    Privacy Policy https://www.instagram.com/legal/privacy/
    Host(s).instagram.com
    Cookie Namepigeon_state
    Cookie ExpirySession
    Accept
    Name
    ProviderOpenstreetmap Foundation, St John’s Innovation Centre, Cowley Road, Cambridge CB4 0WS, United Kingdom
    PurposeUsed to unblock OpenStreetMap content.
    Privacy Policy https://wiki.osmfoundation.org/wiki/Privacy_Policy
    Host(s).openstreetmap.org
    Cookie Name_osm_location, _osm_session, _osm_totp_token, _osm_welcome, _pk_id., _pk_ref., _pk_ses., qos_token
    Cookie Expiry1-10 Years
    Accept
    Name
    ProviderTwitter International Company, One Cumberland Place, Fenian Street, Dublin 2, D02 AX07, Ireland
    PurposeUsed to unblock Twitter content.
    Privacy Policy https://twitter.com/privacy
    Host(s).twimg.com, .twitter.com
    Cookie Name__widgetsettings, local_storage_support_test
    Cookie ExpiryUnlimited
    Accept
    Name
    ProviderVimeo Inc., 555 West 18th Street, New York, New York 10011, USA
    PurposeUsed to unblock Vimeo content.
    Privacy Policy https://vimeo.com/privacy
    Host(s)player.vimeo.com
    Cookie Namevuid
    Cookie Expiry2 Years
    Accept
    Name
    ProviderGoogle Ireland Limited, Gordon House, Barrow Street, Dublin 4, Ireland
    PurposeUsed to unblock YouTube content.
    Privacy Policy https://policies.google.com/privacy?hl=en&gl=en
    Host(s)google.com
    Cookie NameCONSENT
    Cookie Expiry6 Month

    Borlabs Cookie powered by Borlabs Cookie

    Privacy Policy Imprint