Reading Between the Lines of Retail Media Headlines

Below-the-Radar News from Walmart, Best Buy and Others Have Big Future Implications

Headline: “Walmart Ad Business Grows 28% in Q3” (Campaign Live)

Between the Lines: Walmart’s Ad and Subscription Businesses Now Produce One Third of the Company’s Operating Profit

Walmart Connect has been on fire, growing between 25-30% for several quarters as it reaches a ~$5 billion run-rate. During the company’s Q3 2025 (quarter ending October 2024) earnings call, Walmart CFO John David Rainey dropped this valuable nugget: “[M]embership fees as well as advertising income contributed to a little more than half of our operating income improvement and a little shy of a third of the overall operating income for the business.”

Rainey also noted that as the operating income from advertising continues to increase, Walmart’s e-commerce business is on the path to profitability. What was once a necessary cost of business to remain competitive with Amazon could soon turn into a profit driver.

This is further confirmation that the Walmart flywheel is now in full-effect and exponential increases may be on the horizon.

Industry Implications: Every large brick-and-mortar retailer is now acutely aware of how ad businesses can transform their P&L as RMNs reach scale. The C-suite is now asking their RMN GMs how they can put the pedal to the metal on revenue growth. They’ll need to aggressively model Walmart Connect’s approach, with the retooling of on-site search and expansion of its third-party marketplace being the primary contributors.