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Walmart is reportedly in talks to acquire smart television manufacturer Vizio for more than $2 billion in a move that could help it keep pace with Amazon — especially with connected TV and video-based media sales — when it comes to performance-based marketing.
Vizio would immediately make Walmart a major player in the affordable smart TV space alongside Roku and Amazon Fire TV. If the deal goes through, Walmart will command more than a fifth of the television market in the U.S. between Vizio and its existing Onn in-house brand, which is powered by Roku’s operating system. Almost 70% of Vizio’s TVs are already sold at Walmart, according to Reuters.
However, many observers believe the primary incentive behind any deal is acquiring Vizeo’s Smartcast streaming software to support its nascent Walmart Connect retail media network.
According to a report from Insider Intelligence, Walmart Connect, which spreads ads based on shopper data across in-store digital displays, connected TVs, radio, and its website, has been growing at a double-digit pace since its launch in 2021. The high-margin business pulled around $3 billion last year, still well behind Amazon’s $35 billion in ad revenues.
Retail media networks have become the fastest-growing part of the U.S. ad industry as Apple and Google crack down on the amount of third-party data they share with advertisers.
If the deal is completed, CPG firms buying ads through Walmart Connect could show those ads to viewers on Vizio TVs in addition to the screens inside 5,000 Walmart stores that pull in 130 million shoppers each week. Walmart believes the biggest area of growth for its ad business will come from selling ads inside stores.
Walmart would also gain access to Vizio’s user base of nearly 18 million active users, ad viewership data, and potentially the ability to track purchases of those ad views to products sold in Walmart stores and via Walmart's online business. Data on TV ad sales and viewership is controlled by whichever company owns a TV’s operating system.
Dave Morgan, CEO of Simulmedia, an ad tech company, told the Wall Street Journal that a potential deal “gives Walmart control over a massive amount of proprietary data — particularly viewing data, which along with its data on what people are buying — is massively important.”
In a research note, Wedbush Securities analyst Alicia Reese wrote that the potential deal “underscores the massive opportunity for the CTV industry to drive ad dollars away from traditional linear television to CTV,” according to Variety. She still sees Roku as “best positioned to capture ad dollars,” as she suspects many e-commerce partners won’t advertise on Walmart’s, Amazon’s, or Google’s platforms.
Jennifer Kent, VP of research at Park Associates, believes a Vizio acquisition could lead Walmart to follow Amazon in developing its own movies and shows. She told Marketplace, “The tech giants aren’t just making products. They’re very interested in having a relationship with you across many aspects of your life.”