Walmart: Why It's Betting on Advertising
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Today's News
Walmart announced the acquisition of Vibe.co, a company specializing in advertising technology for streaming TV.
The deal, valued at approximately $1.4 billion, represents the retail giant's largest acquisition in the past two years.
The stated goal is to strengthen Walmart Connect, the company's advertising division, by adding new tools to help businesses create and manage their advertising campaigns.
The move underscores Walmart's commitment to investing in digital advertising, a sector that is becoming increasingly important even for the world's largest retailers (source: "Walmart, in Biggest Deal in Two Years, Buys Advertising Tech Firm," The Wall Street Journal).
What Entrepreneurs Can Learn from This News
Monetizing Through Advertising
Why would a company that sells groceries, household goods, and thousands of other products spend billions to acquire an advertising technology company?
Because advertising is becoming a massive business, and it will likely grow even larger in the years ahead (source: "Internet Advertising Revenue Report," IAB & PwC the world's leading authority on digital advertising).
This doesn't mean Walmart wants to stop selling products and rely exclusively on advertising for its revenue.
Walmart will continue doing what it has always done.
What it is doing is building a new revenue stream alongside its traditional one.
And if a company that ended 2025 with $730 billion in revenue is investing heavily in advertising - and even ChatGPT is experimenting in the same direction - then that's a signal entrepreneurs should pay close attention to.
There are valuable lessons here for businesses of every size.
For decades, we've taken for granted that the only way to make money is to create a product, sell it, and get paid by the customer.
That principle still holds true, but in many industries, and especially for companies being launched today, it's also the hardest path because competition is ruthless in almost every market.
So perhaps it's time to rethink business strategy.
Think about how many services you use every day without spending a dime:
- Google is free.
- Gmail is free.
- Google Maps is free.
- Facebook is free.
- Countless news websites are free.
- Thousands of apps can be used for free.
Yet the companies behind them generate billions of dollars in revenue.
How?
Because someone else pays instead of the user: advertisers.
If you can generate part of your revenue through advertising, the goal becomes attracting as many people as possible by offering a service useful enough to make them want to come back every day.
For some businesses, that could mean dramatically lowering prices, while for others it could even mean offering some of their services for free (source: "Making 'Freemium' Work," Harvard Business Review).
Some entrepreneurs could build an entire business around free tools that attract users and monetize that attention through platforms such as Google AdSense, sponsorships, or direct advertisers.
This blog you're reading follows exactly the same principle.
Of course, this model doesn't work for every type of business.
If you manufacture industrial machinery, you probably can't give away your work and expect advertising to cover the costs.
Yet many digital businesses - software, websites, online platforms, apps, and web services - could benefit from an ad-supported model.
The same idea can work surprisingly well in the physical world, especially for service businesses.
Imagine a coworking space that offers free access one day a week, with local companies paying to advertise their products inside the facility.
A car wash could offer heavily discounted washes sponsored by insurance companies, tire brands, or local dealerships.
An indoor children's playground could keep admission prices extremely low while generating significant revenue from advertisers targeting families, birthday party sponsors, and local businesses.
Even a gym could offer free introductory memberships funded by sports supplement brands, physical therapists, and wellness companies looking to reach an interested audience directly.
Why would anyone choose this approach?
Because, as I mentioned earlier, competition today is fiercer than ever.
Entering a market with products or services that established companies have been successfully selling for decades is incredibly difficult.
Why should customers choose a newcomer when trusted brands already exist?
This is where advertising can become a powerful differentiator.
If advertising allows you to dramatically lower your prices, or even offer part of what you provide for free, you eliminate one of the biggest barriers for new customers: paying to try something new and, in some ways, unfamiliar.
Once people begin using your service regularly, you've created an opportunity to build trust, loyalty, and ultimately a sustainable business that doesn't depend on a single source of revenue.