Ad-ditional income: Walmart is looking to grow its ad business

2/20/24 7:00PM

Anything you can do...

With all-time-high e-commerce sales, plans to expand its drone delivery service, and continued efforts to boost its burgeoning advertising business, Walmart is beginning to look a little more like Amazon with each passing day.

However, the brick-and-mortar behemoth still has some way to go on all 3 fronts: its global ad business, for example, was up some 28% to $3.4 billion last year, but remained just a fraction of its e-com competitor, which hauled in a staggering $14.7 billion in Q4 alone.

Ad-ditional income

Walmart execs will be hoping that the newly-announced $2.3 billion acquisition of smart TV maker Vizio will accelerate its ad offering. The retailer sees the deal as an opportunity to offer its customers “innovative television and in-home entertainment and media experiences”, while combining with its media arm, Walmart Connect, to help partner brands “realize greater impact” from their advertising spend.

Although Walmart only recognized $3.4 billion in advertising revenue last year (less than 1% of total sales), ads are an exciting proposition because the margins in the division are a completely different ballgame compared to its legacy retail business (chart). In fact, Walmart's CFO has predicted that the company’s future profitability might rely more on ads and services than its enormous retail empire.

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.