Walmart’s Ad Business Jumps 38% in Q2 as Retail Media Powers Earnings
- 3 days ago
- 3 min read
Walmart’s global and US advertising businesses each grew 38% year over year in Q2, with Walmart Connect up 43%, while Target’s retail media rose about 20% — a widening gap that cements Walmart Connect as one of the most powerful ad engines in US retail.
The numbers
In its Q2 fiscal-2027 results, Walmart reported that its global and US advertising businesses each grew 38% year over year, with Walmart Connect — its US retail media network — growing even faster at 43%. The ad “flywheel” again offset softer core store performance. Target, reporting the same week, posted retail media growth of roughly 20% to about $279m.
Put side by side, the two results tell a K-shaped story: the retail media leader accelerating, the challenger growing but falling further behind.
Why retail media is the margin story, not a side hustle
Advertising is dramatically higher-margin than selling groceries. Every dollar Walmart Connect earns drops far more profit to the bottom line than a dollar of retail sales, which is exactly why Walmart keeps leaning into it. The ad business increasingly funds the price investments and margin pressure elsewhere in the P&L.
That’s the strategic flywheel: scale drives shopper data, shopper data drives ad value, ad profit funds lower prices, lower prices drive more scale. Walmart’s 38% is that loop compounding — and it’s why the gap with Target is widening rather than closing.
Marketing Minute’s read: brands should reward performance, not loyalty
For advertisers, the temptation is to spread retail media spend evenly across networks to keep every retail partner happy. The Walmart–Target divergence argues for the opposite: concentrate budget where the audience scale, data and measurement are strongest, and hold every network to the same incrementality bar.
It’s also a reminder that “retail media network” is not one homogeneous category. A 43%-growth network with Walmart’s data depth is a different proposition from a sub-scale one, even if both sit in the same line of your media plan. Treat them as distinct products with distinct returns.
What businesses should do now
Re-baseline your retail media allocations against actual incremental return per network rather than relationship management, and pressure-test whether spread-thin spending is quietly subsidising weaker networks. Where a leader is compounding, concentration — not diversification for its own sake — is usually the higher-return call.
Quick FAQ
How fast did Walmart’s ad business grow in Q2?
Walmart’s global and US advertising businesses each grew 38% year over year, with Walmart Connect, its US retail media network, up 43%.
How does that compare with Target?
Target’s retail media grew roughly 20% to about $279m in the same period — solid, but widening the gap with Walmart’s accelerating ad engine.
Why does retail media matter so much to Walmart?
Advertising is far higher-margin than retail sales, so ad profit helps fund price investment elsewhere — a flywheel where scale, data and ad value compound together.
Retail media isn’t a side hustle for Walmart; it’s the margin engine quietly funding everything else. When the leader is compounding at 38% and the challenger is stuck near 20%, the message for advertisers is uncomfortable but clear: reward performance, not relationships. Spreading budget to keep every retail partner happy just subsidises the networks that can’t keep up. — Daniel Nikolla, Founder of Merx Marketing
‘Retail media network’ isn’t one category — hold each to the same incrementality bar and concentrate budget where data, scale and measurement actually compound.
Is your retail media budget allocated by proven incremental return — or by which retail relationships you’re trying not to upset?
If you would like to know more about this topic, please contact us on danieln@merxmarketing.co.uk
Sources: CNBC, PPC.land, MediaPost.
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Written by Daniel Nikolla, Founder of Merx Marketing Ltd and Marketing Minute
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