1. What the Numbers Say — 53% Ad Revenue Growth
In third quarter fiscal 2026, Walmart’s global advertising business grew an impressive 53% year‑over‑year — a standout performance compared with its overall retail growth.
- Walmart Connect in the U.S. (ex‑VIZIO) also posted double‑digit growth (~33%), showing the core retail media arm gaining traction. (corporate.walmart.com)
This advertising segment is now one of the fastest‑growing parts of Walmart’s business, often outpacing e‑commerce and traditional store sales. (Nasdaq)
2. How Advertising Factors Into Walmart’s Strategy
Transforming from Retailer to Retail Media Powerhouse
Walmart initially built its reputation on low‑price retailing and brick‑and‑mortar dominance. But increasingly, its advertising arm — Walmart Connect — operates more like a digital media business, monetizing Walmart’s massive customer traffic and shopper data:
- Walmart leverages closed‑loop shopper data (real purchase behavior) to offer targeted advertising with measurable outcomes for brands — a gold standard in retail media. (LinkedIn)
- The VIZIO acquisition (a connected TV maker) has expanded Walmart’s ad inventory and formats, especially in digital and TV screens. (Marketing Dive)
This approach mirrors what Amazon has done with Amazon Advertising — turning retail traffic into ad profit — but Walmart’s mix uniquely combines physical store data with online signals too. (FinancialContent)
3. Why Advertising Growth Matters
Higher Margins
Unlike Walmart’s core retail business — which operates on thin product‑level margins — advertising carries significantly higher profit margins. That means advertising can contribute more to operating income growth per dollar of revenue compared with selling goods.
- As Walmart’s earnings show, advertising and membership income expansion help offset pricing pressures and cost inflation. (Zacks)
Diversification of Revenue Base
Walmart is no longer just dependent on:
- Selling groceries and general merchandise
- Competing on price in stores and online
Instead it’s generating new digital revenues from brands that want to reach Walmart’s massive shopper base — a shift that decreases reliance on traditional retail cycles.
4. Case Evidence from Recent Results
Third Quarter FY26 Highlights
- Global advertising business up 53%, including the impact of VIZIO.
- U.S. Walmart Connect up 33% without VIZIO.
- Membership and other income up 9%, supporting recurring revenue streams. (corporate.walmart.com)
Trend Over Time
Earlier quarters also showed strong acceleration:
- In fiscal Q2 FY26, global advertising jumped 46%, including Walmart Connect up ~31%. (corporate.walmart.com)
- And before Walmart acquired VIZIO, its advertising had already grown roughly 27–29% annually. (Marketing Dive)
Taken together, this shows consistent robust expansion in ad revenues, accelerating as Walmart builds out its retail media offerings.
5. What This Means — Is Advertising a “Core Profit Engine”?
Yes — Advertising Is Becoming Fundamentally Strategic
Advertising isn’t just a side business: it’s increasingly central to Walmart’s ecosystem because it:
- Drives high‑margin revenue that isn’t tied to selling inventory.
- Leverages Walmart’s unique data culture — blending in‑store, e‑commerce and marketplace insights. (LinkedIn)
- Attracts brand dollars away from pure digital platforms (social search, eCommerce ads) to retail media, a faster‑growing subset.
This makes advertising closer to a profit engine than before, functioning as a leveraged growth driver in Walmart’s broader transformation:
Unlike store sales, Walmart doesn’t carry inventory or fulfillment costs on ad revenue.
Advertisers pay for visibility into real purchase behavior — still rare outside the biggest platforms.
Walmart combines ad dollars with membership and marketplace growth, feeding multiple recurring streams.
6. Expert & Market Commentary
Analyst Perspective
Market analysts view Walmart’s ad surge as proof that retail media is a high‑margin engine within a low‑margin business, one that:
- Helps sustain profitability in inflationary or price‑competitive retail environments
- Supports Walmart’s transition to a tech‑adjacent, data‑enabled company
Often, retailers see advertising revenue as a natural extension of digital transformation — Walmart appears to have executed it at scale. (LinkedIn)
Investor Reaction
Investors generally view this diversification positively, as advertising growth offers:
- Profit cushion against retail sales volatility
- Recurring, higher‑margin revenue less exposed to product seasonality
- Enhanced digital ecosystem monetization
While core retail still dominates total revenue, the advertising segment’s rapid growth is an engine for future profitability as Walmart builds advertiser relationships and tech capabilities.
7. Broader Industry Context
Retail Media as a Sector Trend
Walmart’s success isn’t happening in isolation:
- Amazon’s ad business has long driven outsized profits relative to core product sales. (FinancialContent)
- Other retailers (Target, Kroger) are also expanding retail media platforms — but Walmart’s sheer scale and combined physical + digital footprint give it an edge.
Competitive Landscape
Walmart’s data depth — from brick‑and‑mortar purchases to online baskets and marketplace behavior — creates a uniquely closed‑loop retail media proposition for advertisers looking for actionable ROI. (LinkedIn)
8. Summary — Full Picture
| Metric / Segment | Growth / Detail |
|---|---|
| Global Ad Revenue (Q3 FY26) | +53% YoY (including VIZIO) (corporate.walmart.com) |
| Walmart Connect U.S. (Ads) | +33% YoY (corporate.walmart.com) |
| Advertising vs. Retail Growth | Outpacing overall revenue expansion (Nasdaq) |
| Strategic Role | High‑margin, scalable, data‑driven profit contributor (LinkedIn) |
| Competitive Trend | Part of broader retail media boom (Amazon, others) (FinancialContent) |
Conclusion
Walmart’s 53% surge in advertising revenue is more than a one‑off upswing—it’s a reflection of a strategic shift. Advertising is evolving into a core profit engine by tapping Walmart’s vast shopper data, digital reach and premium platforms like Walmart Connect and VIZIO‑powered channels. While traditional retail sales still form the bulk of revenue, the fast‑growing ad segment is increasingly critical for profitability, diversification, and future growth — a hallmark of Walmart’s transformation from retail giant to retail media powerhouse. (LinkedIn)
Here’s a case‑study‑style analysis of Walmart’s advertising revenue surge (~53% in Q3 FY26) — with real examples, campaign outcomes and industry comments to help you understand whether advertising is becoming a core profit engine for the retail giant. (corporate.walmart.com)
Case Study 1 — Q3 FY26: Advertising Rocketing Ahead
Overview: Ad Revenue Growth
In its third quarter fiscal 2026 earnings, Walmart reported that its global advertising business jumped 53% year‑on‑year, including sales from its retail media network Walmart Connect and contributions via the Vizio acquisition.
- Walmart Connect (U.S.) grew 33% (excluding Vizio), a core driver of the surge.
- Membership and other income also rose, but advertising stood out as one of the fastest‑growing segments. (corporate.walmart.com)
Why this matters: Advertising revenue is now far outpacing overall retail growth (Walmart’s total sales grew ~5.8%), signaling a structural shift toward high‑margin media income. (corporate.walmart.com)
Case Study 2 — Walmart Connect: Retail Media in Action
Walmart Connect Campaign Results
A Walmart Connect case study with a major CPG brand (e.g., Kraft Heinz) illustrates how retail media drives measurable sales lift:
- Offsite display ads generated a 14% sales lift.
- Onsite display saw over 11% sales lift and contributed significant incremental ROI.
- Video and audio placements also showed positive returns for brands investing across Walmart’s ad ecosystem. (walmartconnect.com)
Implication: These results show retail media ads producing direct, attributable sales impact — a key reason advertisers are shifting budgets into Walmart’s system.
Case Study 3 — Vizio Acquisition Supercharges Advertising Reach
In late 2024, Walmart acquired Vizio for ~$2.3 billion, bringing connected‑TV inventory into its advertising mix. In 2025, Vizio contributed to:
- Broader connected TV (CTV) advertising offerings.
- A diversified ad portfolio beyond traditional retail media — including TV screens at home. (Solomon Partners)
Result: Walmart’s global ad business grew ~50% in earlier quarters when including Vizio — indicating this strategic integration is adding scale and reach. (Marketing Dive)
Why Advertising Is Becoming a Core Profit Engine
1. High Margins vs. Traditional Retail
Regular retail operations (groceries, merchandise) run on thin margins. In contrast, advertising — particularly digital and retail media — typically carries much higher profit margins, providing Walmart with a growth engine outside product sales. Analysts note that advertising and membership together have formed more than a quarter of operating income in prior years, highlighting rapid profitability contributions. (Forbes)
2. Data‑Driven, Closed‑Loop Targeting
Walmart’s competitive advantage lies in shopper data from both physical stores and online sales — enabling brands to target ads with actual purchase behavior. This closed‑loop retail media model is attracting advertisers shifting budgets from general digital channels to performance‑driven ad spend. (LinkedIn)
3. Expanding Ad Formats and Tools
Walmart continues upgrading its ad offering:
- Launch of a Display Advertising API enables better integration with ad tech partners.
- Onsite and offsite solutions, digital out‑of‑home displays in stores, and market targeting tools broaden where and how advertisers can reach consumers. (Retail Dive)
This reflects a broader industry trend: retail media networks are rapidly growing, with many marketers planning to increase their retail media budgets at the expense of traditional channels. (McKinsey & Company)
Comments from Industry and Market Observers
Analyst/Strategic Commentary
Retail media is one of the most profitable new lines for Walmart. Analysts emphasize that ad revenue isn’t a “nice‑to‑have” but a strategic profit center that helps offset the low margins of everyday retail.
Closed‑loop attribution (purchase mapping) gives Walmart an edge over basic display ad networks, because advertisers can track which ads actually drive purchases. (LinkedIn)
Industry Context & Sector Trends
Retail Media Networks Growing Fast
Retail media isn’t unique to Walmart — networks like Amazon Advertising and Target’s Roundel are also expanding, but Walmart’s combination of physical retail footprints and e‑commerce data gives it a unique scale advantage in impressions and shopper reach. Walmart reportedly delivered billions of retail ad impressions — ahead of many smaller retail media networks. (Retail Dive)
Shift in Marketer Budgets
Marketers are increasingly allocating spend to retail media networks because they can deliver performance advertising tied directly to sales, which macro trends suggest is outpacing traditional display and search growth. (McKinsey & Company)
Summary — Main Takeaways
| Element | Insight |
|---|---|
| Revenue Growth | Global ad revenue up ~53% in Q3 FY26, including Walmart Connect U.S. up 33% YoY. (corporate.walmart.com) |
| Ad Profit Contribution | Advertising and memberships now account for a significant share of profits, helping offset thin retail margins. (Forbes) |
| Case Evidence | Walmart Connect campaigns show double‑digit sales lift and high ROI for brands. (walmartconnect.com) |
| Strategic Expansion | Vizio acquisition expands ad formats into TV and CTV ads, broadening media reach. (Solomon Partners) |
| Industry Trend | Retail media networks are growing quickly and attracting ad budgets from traditional digital channels. (McKinsey & Company) |
Conclusion
Walmart’s 53% surge in ad revenue underscores how advertising — especially its retail media business — is evolving from a peripheral add‑on into a core profit engine. The combination of high margins, closed‑loop shopper data, expanded media formats (including CTV via Vizio), and strong brand interest point to ad revenue as a strategic growth pillar for Walmart’s future earnings outlook. As retail media continues to expand industry‑wide, Walmart’s scale and data‑rich ecosystem position it as a major player in the broader advertising market. (corporate.walmart.com)