Retail Giants Double Down on Onsite Advertising Amid Industry Decline

Amazon and Walmart are increasingly relying on their own digital storefronts to display sponsored products and placements, targeting shoppers who have already shown intent to buy. According to Sensor Tower, Amazon generated 56% of its retail-media impressions onsite during the first half of this year, while Walmart's onsite share rose to 44%, up from just 17 percentage points a year earlier.

This shift in strategy is significant because advertising has become an increasingly important profit lever for both retailers. Amazon's ad business already generates enormous revenue, reaching $19.8 billion in the second quarter, a 26% increase from last year. Walmart's global advertising business grew 38% during the same period.

The move away from traditional digital-ad platforms is happening despite a broader decline in retail-media impressions across U.S. networks. Total impressions fell 17% to 223 billion in the first half of this year, but Amazon still controlled around 60% of those impressions, despite its own ad business declining by 16%.

Investors are watching closely to see if Amazon and Walmart can maintain their advertising growth even as industrywide impressions contract. A greater share of ads appearing close to checkout could improve monetization without requiring equivalent growth in traffic, but there is also a risk that too many sponsored placements could weaken the shopping experience.