Walmart is reportedly in discussions to acquire Vizio, a smart television manufacturer, for more than $2bn.
This potential acquisition is part of Walmart's strategy to expand its advertising business and compete with e-commerce giant Amazon, the Wall Street Journal (WSJ) reported.
Boosting advertising business
Walmart, including its Sam’s Club chain, has been Vizio’s largest customer historically.
The acquisition would give Walmart more opportunities to sell ads and promote its products to shoppers, leveraging Vizio's large customer base.
The news agency said the deal talks highlight the growing competition among retailers for advertising dollars. Companies such as Best Buy, Kroger, and Instacart are also entering the retail media space.
Advertisers are increasingly shifting their budgets to retail media, which, according to the WSJ, is expected to reach $59.6bn in US ad revenue this year.
Walmart's advertising unit, Walmart Connect, has become a significant revenue stream for the company. In 2023, Walmart reported approximately $2.7bn in global advertising revenue. The potential acquisition of Vizio could make selling ads through connected TVs more appealing to potential advertisers.
Vizio's background and strategy
Vizio, founded in 2002 by CEO William Wang, is known for its low-price TVs. However, the company has been expanding into advertising and streaming services in recent years.
Vizio sells ads that users see when they turn on their TVs and inside some free video services.
Potential benefits
For Walmart, the potential deal is about growing advertising revenue rather than selling more low-price TVs.
Acquiring Vizio would give Walmart access to a TV operating system and more ad inventory and ad viewership data. This data could help Walmart and its advertisers target ads more effectively and measure their impact.
The potential acquisition of Vizio by Walmart highlights the growing importance of advertising revenue for retailers. As retailers compete for advertising dollars, access to data and ad inventory becomes increasingly valuable.
If the deal goes through, Walmart could gain a significant advantage in the retail media space.
