Walmart Connect, the retail media division of Walmart U.S., announced robust growth in its advertising revenue for the second quarter of 2026, reaching $1.2 billion. This figure represents a substantial year-over-year increase of 38%, surpassing internal and Wall Street forecasts. For the first time, Walmart Connect's quarterly ad revenue exceeded that generated by Amazon's Sponsored Products unit from third-party sellers in comparable marketplace segments, according to data from Marketplace Pulse and Ecommerce Times. This performance puts Walmart Connect on an annualized run rate of approximately $5 billion.
Several strategic initiatives are fueling this momentum. Walmart's in-store media network, which now encompasses over 4,700 U.S. locations with digital endcap screens and self-checkout ad units, is providing crucial first-party closed-loop attribution data, highly valued by CPG brands. Additionally, the expansion of Walmart's Luminate data platform to mid-market brands in March 2026 offers enhanced shopper-segmentation capabilities. The significant growth in Walmart+ paid subscribers, exceeding 28 million in May, provides the ad platform with a large, identifiable audience comparable to Amazon Prime's addressability.
The fastest-growing ad categories reflect Walmart's grocery strength, including household consumables, personal care, over-the-counter products, and shelf-stable food. Unexpectedly, mid-market electronics and home goods brands are also shifting budgets to Walmart Connect, attracted by cost-per-click rates that are 30-40% lower than equivalent Amazon Sponsored Product placements, often yielding comparable or better returns on investment. While still trailing Amazon Advertising's estimated $58 billion in full-year 2025 revenue, Walmart Connect's rapid growth rate of 35%+ year-over-year compared to Amazon's 18% pace suggests a meaningful narrowing of the gap within the next 36 months.
In a strategic move to further bolster its advertising capabilities, Walmart has agreed to acquire Vibe.co, a connected-TV advertising platform, in a deal reportedly valued between $1 billion and $1.4 billion. Vibe.co, which specializes in bringing SME media to CTV and was valued at $410 million just nine months prior, generated $100 million in annual recurring revenue last year and serves over 10,000 SME and mid-market advertisers. This acquisition, expected to close by the end of fiscal year 2027, will integrate Vibe.co's self-serve campaign activation tools with Walmart's commerce data, closed-loop measurement, and expanding media assets, aiming to attract more advertising dollars to Walmart Connect. This acquisition builds on Walmart's earlier $2 billion-plus purchase of Vizio and its ongoing integrations with partners like Magnite, Google DV 360, and Yahoo to strengthen its position in retail media and CTV.
