Walmart and Target see rapid growth in retail advertising revenue

Major retailers are seeing significant growth in advertising revenue, which is currently outpacing the growth of their core merchandise sales. Walmart Connect reported a 43% year-over-year increase, while Target’s advertising arm, Roundel, grew by approximately 29% to reach $279 million. Amazon’s advertising services also saw a substantial rise, increasing 26% to $19.8 billion.

Retailers are expanding their advertising reach beyond simple sponsored listings to include marketplaces, eCommerce traffic, video, and connected TV. This shift allows companies to leverage transaction data and traffic to generate high-margin revenue without the overhead of inventory and fulfillment required for physical goods. Walmart has raised its full-year earnings guidance following this performance.

In the broader financial sector, Citi is expanding into commerce media through the acquisition of Kard, a platform that connects financial institutions and brands via transaction data. Meanwhile, the Association of National Advertisers has identified challenges facing the sector, including a lack of standardized measurement for retail media effectiveness.