Walmart Diversifies Advertising Tech Partnerships, Ends Exclusive Deal with The Trade Desk

Walmart has renegotiated its partnership with adtech firm The Trade Desk, ending the exclusive deal and allowing Walmart to use other platforms. This is a significant blow to The Trade Desk, which has relied heavily on Walmart as a client. Walmart's ad revenue reached $4.4 billion in 2024, a 27% increase from the previous year. The changes suggest that Walmart is preparing for a more independent future in the digital advertising space.

Walmart Inc. (WMT) has recently renegotiated its partnership with adtech firm The Trade Desk (TTD), ending the exclusive deal and allowing the retail giant to use other platforms for its digital advertising needs. This strategic move comes as Walmart continues to expand its ad tech capabilities and aims to reduce reliance on third-party providers.

The renegotiation, which was reported by The Information [1] and Ainvest [2], marks a significant shift in Walmart's digital advertising strategy. The retailer had previously been exclusively using The Trade Desk's programmatic ad-buying tools to access its shopper data for targeting. However, Walmart has now opted to explore other platforms, potentially benefiting direct rival Amazon (AMZN) which has been actively courting advertisers away from The Trade Desk.

The shift is part of Walmart's broader strategy to build a more independent and scalable advertising infrastructure. By integrating AI-driven tools, real-time optimization, and a self-service API for display ads, Walmart aims to create a more flexible ecosystem that appeals to both small brands and large advertisers. Partnerships with ad tech firms like Pacvue, Skai, and DataCaciques, as well as collaborations with Roku and TikTok, further enhance its capabilities and expand its reach into connected TV (CTV) and social commerce.

Walmart's decision to end the exclusive deal with The Trade Desk comes amidst a broader trend in the retail media landscape. Retailers are increasingly prioritizing in-house ad tech solutions to leverage first-party data and build privacy-compliant advertising ecosystems. Walmart's move highlights this trend, as it seeks to capture a larger share of the $12 billion CTV ad market and challenge Amazon's 67% dominance in the U.S. retail media sector.

The renegotiation has had an immediate impact on The Trade Desk's stock price, with shares dropping nearly 6% before midday on Thursday [1]. However, the long-term effects on The Trade Desk and the broader ad tech industry remain to be seen. While Walmart's current ad expansion benefits The Trade Desk, the retailer's push toward in-house solutions could erode the ad tech company's margins and market position over time.

For investors, the Walmart-Trade Desk dynamic highlights a broader trend: the rise of in-house ad tech solutions and the decline of third-party platforms. While Amazon and Walmart are well-positioned to capture the lion's share of the RMN market, ad tech players like The Trade Desk face an uncertain future. Investors should monitor Walmart's ad revenue growth and The Trade Desk's client retention rate to gauge the potential impact of this shift.

References:
[1] https://seekingalpha.com/news/4485495-walmart-amends-adtech-agreement-with-trade-desk-which-might-benefit-amazon
[2] https://www.ainvest.com/news/walmart-ad-tech-reimagined-revised-trade-desk-partnership-reshape-retail-advertising-landscape-undermine-amazon-dominance-2508/