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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Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 22, 2022

How an Amazon SEO Agency Should Be Serving Your Brand

If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.

Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.

At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise  are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead. 

What is an Amazon SEO Agency?

An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.

A great Amazon SEO Agency partner will:

Prioritize Your Success

Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance

Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS. 

To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.

Provide Detailed Competitive Insight

A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.

It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.

Reduce Your Ad Spend Over Time

Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins. 

Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.

Amazon SEO Optimization and More

As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.

Contact us to learn more about our SEO optimization services.

Sept 20, 2022

4 Ecommerce Marketplace Consultant Must-Haves

Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces. 

Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.

So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.

Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products. 

What is an Ecommerce Consultant?

An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.

An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.

Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.

1. Brand Obsession/Specialization/Passion

At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services. 

2. Proven Results

It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.

3. Wide Range of Marketplace Expertise

It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.

4. Network of Resources

The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.

Achieve Your Ecommerce Goals With Pattern

Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces. 

With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.

Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.