How Walmart Connect’s Advanced Second-Price Auction Focuses on Relevancy

As retail media continues to mature, retailers are evolving to handle the increasing expectations of advertisers. Walmart Connect has demonstrated a desire to help its marketing clients maximize their investments in its platform with its continual rollout of innovative and valuable features.

In June via the blog post, How Walmart Search advertising is evolving, Walmart Connect’s Senior Product Marketing Manager, Dionne Resnik, shared some of the company’s most recent enhancements. These include additional Sponsored Products placements and a new Top Search Trends daily report to help advertisers better understand how shoppers find and purchase products.

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. 

A recent post shared some initial details:

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.

This move to a second-price auction helps Walmart Connect’s program to be on par with other retailer publishers. As we’ve seen in the initial growth phases of other channels, standardization across publisher offerings is a clear signal of maturation — an excellent sign for retail media advertisers. 

More details on Walmart Connect’s second-price auction

The June announcement also includes a one-page guide on this new auction dynamic to help marketers better understand how it will work. 

When a customer searches for a product on Walmart’s site or app, the platform runs a real-time auction to determine which ads will appear along with the search results, and in what placements. To choose the winner of each ad placement, the platform first determines which competing ads are relevant.

It awards the placement to the most relevant ad and establishes the cost-per-click price after considering the bids of the other relevant ads. The auction winner pays the amount necessary to win based on competing bids, which may be less than their maximum bid. 

WMC’s advanced second-price auction uses <br>relevancy + the bid to better match ads to shoppers

Relevancy is now at the heart of Walmart Connect

As you read above, Walmart Connect’s second-price auction “..awards the placement to the most relevant ad…” The new, one-page guide also defines ad relevancy: 

Ad relevance is determined by how closely the advertised product matches the customer’s intent, the ad’s contextual relevancy, the quality of item page content, and the product’s historical performance at Walmart. 

Thus, Walmart Connect now uses relevancy plus the bid price to determine which ads are served. Relevancy is overriding some of the previous logic and eligibility criteria from the past. For example, before this change, your product had to rank organically in the top 128 search results for the keyword to be eligible for advertising. 

This restriction potentially kept relevant ads from showing up that consumers may want to see and buy. So, this new change to Walmart Connect’s auction dynamics will offer users a better shopping experience. 

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“We have been ready for Walmart Connect’s second-price auction for a while, and our product teams have been working closely with Walmart to roll this out seamlessly for our clients,” says Skai’s Kevin Weiss. “We believe our machine-learning optimization algorithms will drive even better results with these important auction updates from Walmart.”

The second-price auction should give advertisers more confidence to push their bids higher and deploy new strategies because they can count on relevancy to drive better ad matching with more intelligent pricing.

Skai + Walmart Connect for retail media success

Skai now supports Walmart Connect’s second-price auction and will continue to support the new innovation on the platform.

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. Walmart Connect’s shift to the second-price auction signals that retail media is becoming mature.

Skai’s Retail Media solution empowers brands to plan, execute, and measure digital campaigns that meet consumers when and where they shop. Built with best-in-class automation and optimization capabilities, our unified platform allows you to manage campaigns on Walmart and 30+ retailers, including Amazon, Target, and Instacart all in one place.

For more information, schedule a quick demo to see Skai’s omnichannel marketing functionality. 

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