3 Reasons Why Brands Should Use Walmart Connect's Second-Price Auction

Rose Huang

June 13, 2022

Whether you are a brand currently on Walmart marketplace or considering an upcoming launch, it is important to understand Walmart Connect’s updated advertising offerings so your advertising strategy is set to win.  The Walmart Connect advertising platform has moved from a first-price to a second-price auction bidding system, which helps brands stretch their advertising dollars farther and drives more traffic which improves your success on Walmart’s marketplace by increasing page views and product sales. 

At Pattern, an official Walmart partner, our advertising team has worked with countless brands on Walmart.com to build and execute advertising strategies and campaigns across a myriad of advertising models that optimizes your ad spend and improves return on ad spend (ROAS).  

Historically, on Walmart.com advertising has been more manual and labor-intensive, and involved more guesswork than brands can afford to experiment with–it is hard for any executive to justify consistently poor ROAS.  So we see brands throw listings up, thinking they will drive traffic through organic channels, but a customer cannot buy a product they do not know about.   Organic ranking on Walmart.com relies on proven sales history, but new products take awhile to ramp up, remaining buried in search results for way too long.  And to increase existing product sales, a brand needs to reach new customers, but the previous first-price auction bidding system deterred brands from spending on ads due to poor ROAS.  Therefore, it is key to spend on advertising and leveraging the second-price auction on Walmart.com will drive traffic for your brand.

Because we know advertising remains an essential way to accelerate your products on marketplaces like Walmart.com, Pattern has the resources and knowledge to continuously improve and update your strategy on new Walmart Connect formats.

Why Advertise on Walmart.com

Walmart.com boasts over 450 million average monthly users, which, for context, is greater than the population of the entire EU, while providing a proportionally lower number of sellers per product type, especially in comparison to Amazon. Since Walmart.com is far less saturated, it is a better place for sellers to get an early-adopter advantage, and experience relatively low competition between sellers, which drives down the costs of your ads.

3 Benefits of Second-Price Auction to Brands

1. More Effective Spend

Walmart’s original, first-price, pay-per-click auction model was relatively blind. A brand would either pay more than what was necessary to win the bid on sponsored product placements or under-bid and lose the spot. And, if they lost the ad placement, there was no way to know how much higher to set their base bid in order to win. 

The only benefit to the now defunct first-price auction bidding was the absolute nature of knowing how much you were bidding as a base cost. But winning the ad placement spot took constant monitoring and a manual stepping-down or -up method to get the bid amount as precise as possible.  So any money you saved in ad spend was essentially spent in resources to monitor and adjust all bids.

Second-price auction bidding potentially lowers the minimum spend threshold for participation in advertising, and creates more uniformity between advertising on Walmart and Amazon.  Brands using second-price auctions are reducing ad spend and effectively improving ROAS as well.   And now, brands can trust that when using bid multipliers, they are not overpaying by even larger margins when the guesswork is taken out of the base bid.  And, by using Walmart’s second-price auction, brands are paying significantly less for every ad click—only $0.01 more than the next highest bid. 

2. Simple and Intuitive

Advertising on Walmart Connect via the second-price auction is more accessible to more brands than ever before.  For any brand running ads on Walmart connect, the second-price auction is simpler, more user friendly, and intuitive than previous platforms. 

Now, brands only have to set a bid ceiling and the platform does the price adjustments for you.  Therefore, you will dedicate less time and resources executing your ads and can focus time on the strategy and budgeting for your campaigns.   In addition, it ultimately costs less to advertise because each bid will only be won by one cent over the next best.  Gone are the days when you would have huge gaps between the next best bid, creating a lack of transparency and losing control over your campaigns.   In addition, the cost per click is now easier to follow, and allows you to track competitive bids which improves your strategic next move.

3. Improve Control on Walmart.com

In this new format, generally increasing your budget for bids is not the ticket to winning the ad placement, you need to control your listing.  Second-price bidding incentivizes brands to optimize their product listings, which ultimately drives a sponsored item rank ahead of the competitive set.  This happens because the second-price auction focuses more on an item's relevance to the search query and having a solid listing helps the algorithm process a product’s relevancy.  

Besides increasing the chance of winning the sponsored ad spot, having a solid listing increases the chance of conversion when the customer has a clean, clear, and compelling product page, and the sponsored ad presented is relevant to what the customers are looking for.

With more effective and compelling product imagery and copy, brands have better control over their advertising opportunities because, with a best-in-class listing, they can start bidding on more keywords than before.  It stretches every penny of a brand's advertising budget a bit further, and Walmart marketplace customers experience a more pleasant, relevant shopping experience, in turn, increasing your brand equity, customer loyalty, and lifetime value.

Pattern Places the Winning Bids on Walmart.com

As the world’s premier global ecommerce accelerator and an official Walmart Partner, Pattern works directly with the Walmart Connect team and can offer insider insights and strategy.  Pattern helps your brand establish, maintain, and maximize advertising on Walmart Connect since we use technology to take the guessing game out of second-price ad bidding by tracking prices and execute data-driven campaigns based on brand and competitive performance. In addition, our brand managers and creative teams make sure your product listing–images, copy and reviews–are curated, accurate, and showcase all the brand values. 

If you’d like to learn more about how we can help you improve your ROAS and win the buy box on Walmart.com and other marketplaces, set up a meeting today.

 Want to learn more or see an example of the Walmart Connect second-price bid system?  Click here

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MAP Pricing vs MSRP: What's the Difference? (blog header)
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MAP Pricing vs. MSRP: What's the Difference?

“MAP” and “MSRP” are two of hundreds of acronyms floating around in the world of ecommerce, and they’re two of the easiest to confuse and misunderstand. While MAP and MSRP do play similar roles, they also have key differences that can work in tandem to support and protect your brand on marketplaces.

So what are MAP and MSRP and why do they matter? Here’s what you should know: 

What is MAP?

MAP (or minimum advertised price) is the minimum amount that a manufacturer or wholesaler recommends resellers advertise their products for. MAP pricing policy is essentially a one-way boundary you set to protect your brand, protect the margins of your resellers, and maintain fair competition across all of your distribution channels.

When setting a MAP policy strategy, remember the important things you’ll want your MAP policy to do are:

  1. Protect the interests of your brick-and-mortar resellers, giving them the margins they need to display and carry your product as well as sell it.

  2. Stay small enough that it discourages resellers from heavily discounting your products and keeps competition fair.

  3. Accurately reflects on the brand image and value you want to reflect.

“Advertising” and “recommends” are the key terms here. MAP policies should only recommend the price that is advertised online or in-store for a product, not attempt to fix the actual selling price of the product—that’s illegal—or recommend the actual selling price. That’s MSRP’s job.

Benefits of MAP

MAP not only keeps competition fair, but allows you to control your brand identity and promote consumer trust of your product and brand. Here are some of the benefits of having MAP policies:

  • Better brand protection and control

  • Creates a level playing field for retailers

  • Reduces bad customer experiences

  • Provides an accurate performance analysis

How Can Brands Effectively Enforce MAP?

It’s critical that MAP policies are structured in such a way that a brand avoids violating anti-trust laws. One way brands can effectively enforce MAP is by simply monitoring online product prices across digital channels to identify fluctuations in the market. 

At Pattern, we help brands not only develop a MAP policy, but also enforce it. Enforcing MAP policies and gaining marketplace control includes finding unauthorized sellers, which Pattern’s data finds. Once Pattern finds the unauthorized sellers, Vorys eControls (Pattern’s legal partner) steps in and handles the takedowns of unauthorized sellers, continuous enforcement of brand management, and reseller policy enforcements.

What is MSRP?

MSRP (or manufacturer’s suggested retail price) is how manufacturers standardize pricing across their resale channel and determine what price is fair for their product. The key difference between MSRP and MAP is that MSRP is the actual price manufacturers set and recommend retailers charge for their goods while MAP is the advertised price. 

MSRP doesn’t necessarily have to be the final price of a product—it’s most often a starting price—but it is determined by taking into account all of the costs associated with the distribution and manufacturing process for a product and the margin amount resellers need in order to make a profit. MSRP also establishes value. For example, if a brand wants to build a premium brand, the MSRP can reflect the actual or perceived value of their product.

Benefits of MSRP

Setting up an MSRP for your product includes the following benefits:

  • Maintains brand equity

  • Establishes brand and product value

  • Standardizes costs across marketplaces

How Can Brands Effectively Enforce MSRP?

Like MAP pricing, MSRP has to be set up as a one-way policy and not an agreement between a manufacturer and a reseller to avoid landing a manufacturer on the wrong side of the law. It’s a recommendation, not a contractual bind. As mentioned for MAP policy, Pattern helps brands effectively enforce MSRP with our proprietary data and expertise to protect their brand. 

How Do MAP and MSRP Work Together?

MAP and MSRP have different applications that may prove useful in different scenarios. For example, MAP policies are typically more useful in marketplaces where competition is fierce and price erosion happens easily if sellers are left unchecked. Ideally, however, MAP and MSRP are a dynamic duo that work together to serve the interests of your brand, support your resale channels, and protect your resellers.

Setting an MSRP establishes value for your product and lets your resellers know you’re serious about controlling channel conflict, maintaining pricing equity, and protecting their margins so they’re more confident setting pricing at the MSRP level.

MAP is the second half of setting a pricing policy. Setting a MAP price for your product, in addition to an MSRP, further standardizes pricing across your resale channel and gives legitimate resellers a fair environment to compete in while setting boundaries against unauthorized sellers harming your brand.

MAP combined with MSRP creates a stronger level of brand protection, giving your brand more sustainable, profitable growth.

Maintain Brand Control With Pattern

MAP policies can be tricky to draft, because there are so many legal lines to tiptoe around and so much nuance that goes into pricing. They can also be tricky to enforce without the right tools. At Pattern, partnered with Vorys, we have the tools and resources to help you maintain brand control on all marketplaces. 

As an ecommerce accelerator, Pattern can help you identify MAP violators and regain control of your brand online so that your image and your resellers are protected. To learn more, contact us today.

Athlon Optics Walmart.com Launch Has Record Setting Sales within 3 Days
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Athlon Optics Walmart.com Launch Has Record Setting Sales within 3 Days

Athlon Optics sells scopes and other optical accessories like binoculars for anyone who may be hunting, shooting recreationally, or competing.  After achieving significant success on Amazon, the brand wanted to launch on Walmart. As a growing marketplace with huge growth forecasts, Athlon saw their competitors already staking claim on walmart.com and saw opportunities for increasing their sales.

As a prestigious brand in its category, with loyal consumers, Athlon does so much with very few resources. With less than twenty employees in the entire company, managing everything from customer service to product development, their ecommerce team needed support to scale to a new marketplace.  And, they needed a partner who had a relationship with and deep understanding of walmart.com to accelerate their growth. Pattern is a one-stop shop for Athlon, providing the resources and expertise, so Athlon could also save budget and stop outsourcing so many different aspects of their marketplace business.

Athlon Optics Prepares for a Seamless Launch

Sometimes brands who transition from 1P to 3P with Pattern have no proprietary sales, marketplace data or content such as product images, video, or optimized copy. These circumstances create a more hands on transition for Pattern and may interfere with launch expectations. 

But Athlon was the consummate partner and overly prepared to transition to 3P– buttoned up, organized, and ready to take on walmart.com’s list of launch needs. Athlon provided all the required assets on time and was very organized.  The images were shot, formatted, and categorized as A+ content that Pattern ported over.  This process dramatically reduced wait times and lag times within the platform.  Plus, since the content was optimized for marketplaces, all images, copy, and listing information uploaded in the first pass. 

Pattern’s Walmart Expertise Leads to Success

But the content worked because of Pattern’s resources and marketplace expertise.  Pattern provided Athlon with a very clear outline of needs and expectations for seamless launch and this process has become a playbook for other brands on walmart.com.  The team’s mutual partnership and Pattern’s diligent follow up with and detailed attention to Walmart processes and logistics prevented Athlon from getting lost in the weeds. 

Three Days is All it Takes

The successful, thorough, and quick transition to 3P with Pattern secured Athlon most likely the fastest ramp-up periods for any brand on Walmart.com.  

Together we achieved success such as:

  • 'Best in class' turnaround–98% faster onboarding than average brand on Walmart.

  • First sale within the first week of landing at Walmart. 

    • Unprecedented turnaround considering the ramp up usually needed to gain momentum and traction with reviews on Walmart. 

  • Exceeded initial first month growth projection by 34%.

Athlon was so impressed by the ease and simplicity of its launch and execution on Walmart that the brand wants to grow our 3P relationship with other marketplaces such as Amazon Canada and Target+.

And, in the meantime, look out for Athlon Optics in Walmart Deal Days in 2022.  A huge win for any brand tied to organic advertising and new traffic opportunities across all media.

Pattern Helps Brands Expand Marketplaces 

Pattern has the 3P partner experience and deep expertise on Walmart and other global marketplaces to help a brand expand their footprint to maintain sales momentum and a competitive edge. Pattern, an ecommerce accelerator, takes on the responsibility of your stock and provides the expert resources needed to successfully launch and continue to grow your revenue on global marketplaces. 

Learn more about Pattern’s expertise and partnership on Walmart.  Contact us today.

Amazon A+ Content
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Amazon A+ and Premium A+ Content: Pros and Cons Brands Need to Know

Long gone are the days when Amazon listings were limited to a simple product description, five bullet points, and eight pictures. As the platform, and number of sellers, has grown, sellers have had to be more and more strategic and eye-catching to increase traffic and conversions on their listings.

Brands on Amazon have plenty of attractive options available to design their Amazon storefront, which reside in two of Amazon’s content tools: A+ Content and Premium A+ Content (or  A++ Content).

Here’s the pros and cons of brands using A+ Content vs. Premium A+ Content:

What is Amazon A+ Content?

Amazon A+ Content is a standard feature available to all Amazon Sellers and free as one of the many benefits of Amazon Brand Registry. 

With A+ Content, a product listing can have more than a plain text description and standard photo reel–it can include high quality multimedia photos and videos alongside eye-catching information to share the product story, and not just the product appearance.

Some noteworthy features that Amazon A+ offers are:

  • Multiple, varied images of a product

  • Strategically concise introduction

  • Video

  • Bullet points

  • 360° product views

  • Matrix comparison charts

  • “What’s in the box” section

What is Amazon Premium A+ Content?

Amazon Premium A+ Content, or Amazon A++ Content, is a tool that goes a level beyond basic A+ Content, giving brands the ability to showcase their product’s most important features and benefits with a modern, visually appealing structure. 

In August 2022, Amazon announced Premium A+ would be available on Seller Central for free usage during a promotional period. Previously, Premium A+ content was available only by invite for brands using Vendor Central and could cost anywhere from $250K and $500K per product. 

With Premium A+ content, a brand visually communicates using imagery and video, and relies much less on text due to strict character limits for product descriptions. According to Amazon, implementing Premium A+ content can increase your sales by 20%.

For the first time ever, Premium A+ expands the usable real estate of the page, using the entire width of the screen for a sophisticated and modern feel.

Some noteworthy features that Premium A+ offers are:

  • Video

  • Full-width imagery

  • More space

  • Clickable Q&A

  • Interactive comparison charts

  • Carousel modules

  • Mobile-friendly and voice-friendly product pages

  • Testimonials

Pros and Cons of Amazon A+ vs. Premium A+ Content

Although their purposes are similar, there are some key differences between A+ Content and Premium A+ Content. Here are the pros and cons for each tool:

Basic Amazon A+ Content

Pros:

  • Free and unlimited use for all Vendors.

  • An effective tool to enhance customer experience and product listings.

Cons:

  • Less features than Premium A+.

  • It's not as visually appealing as Premium A+.

Premium A+ Content

Pros:

  • There are 16 extra modules to choose from that are media-rich and make an impact.

  • You have two more available module slots than Basic Amazon A+.

  • Overall, there are more possibilities for hyper-engaging content.

  • You can expect a sales rate increase of up to 20% with Premium A+, according to Amazon.

Cons:

  • Amazon has positioned Premium A+ content as more of an exclusive tool, requiring eligibility based on past content to qualify for Premium A+ content. 

  • Character limit restrictions are more strict than Basic Amazon A+.

Elevate Your Amazon Content with Pattern

Ultimately, both of these tools exist to help you and your brand provide customers the best online shopping experience possible. Although Premium A+ offers plenty of exciting new options for enhancing customers’ buying experience, it may not be for everyone. Optimizing your Amazon listing with A+ or Premium A+ Content can provide the best opportunity to build a strong reputation for better brand-recognition and customer affinity. 

Our creative and digital marketing experts at Pattern can help brands use A+ Content and Premium A+ Content to increase conversions and give buyers an amazing experience.

Learn how Pattern can help you increase conversions on Amazon. Contact us