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How to Prepare for Walmart Connect Second-Price Auction

Walmart Connect recently unveiled impactful changes to its search relevancy algorithm that improve the search results and brand ability to spend on Walmart by allowing any item to be promoted via Sponsored Products in order to appear in relevant in-grid results. Next up in this round of changes is how Walmart Connect sells advertisements in online auctions. Coming soon, Walmart is implementing a second-price model, which is a more transparent way to award the ad space, and something brands have requested. This post is all about how a second-price auction works, how it affects advertisers, and some best practices on how to win second-price auctions.

How Second-Price Auction Works

The advanced second-price auction is a new bidding process to how Walmart Connect manages pay per click campaigns, similar to how bidding works on Amazon Advertising and Google Ads campaigns. The new system is an online auction, where advertisers will be bidding against each other. Instead of advertisers paying their maximum amount, now they can pay bids higher than the next highest ad to try and win the auction.  This gives Sponsored Products and Search Brand Amplifier advertisers the confidence to submit their best cost-per-click bids without the risk of overpaying.  

On Walmart, the second-price auction still factors in relevancy. On the search term “laundry detergent,” the relevant products will serve an ad and win the auction versus a dryer sheet brand bidding on the same term. Even if the dryer sheet brand has the highest bid, the more relevant products will win the auction.

How Does This Affect Me?

This change from a first to second-price bidding auction will result in more profitable advertising for brands. They can expect to see lower cost-per-click (CPC) ads, and in turn, a higher return on advertising spend (ROAS).  

How to Win Second-Price Auctions

In order to win on Walmart after second-price auction bidding is implemented, advertisers need to bid above the competition and must ensure they’re bidding on relevant terms for their brand’s products. But keep in mind that even if you bid high on terms deemed irrelevant by Walmart’s system, you are not guaranteed to win those placements.

Best Practices to Consider

  • Be sure to bid high to secure Top of Search placements.
  • Use bid multipliers to increase your chances for top performing placements and platforms depending on performance goals.
  • Tier or stagger bids by individual item performance to maximize the efficiency of your budget and potentially improve overall campaign spend and ROAS.
  • Bid your lowest bids on broad-match type for widest audience reach. (Manual campaigns)
  • Bid your highest bids on exact-match type for customers searching with intent. (Manual campaigns)
  • Analyze which keywords drive conversion and move keywords from broad- or phrase- to exact-match types as needed. (Manual campaigns)
  • Increase the daily budget cap during peak sales periods to capture more sales during higher site traffic or events.
  • Test higher daily caps if your budget is hitting the cap consistently to keep your products live onsite longer.

Top Tips for Refreshing Your Strategy Heading into Summer 2022

As we head into the summer season, it’s important to keep a log of all things you can do on a quarterly basis to track past learnings, keep up with seasonal trends, and continue momentum with your sales and profitability on Walmart.  

Here’s a list of tips to consider for Pacvue users.

  • Rule Refresh – Review your rules on each platform at least on a quarterly basis to make sure they’re still fitting the needs of your brands.
  • Revisit Tagging – If historically you have managed your campaigns at the targeting type level (branded/category/competitor, etc.) but you or your client have shifted product strategy and priorities, you can restructure tags to be broken out by price point or high medium and low priority.
  • Make sure that you include as much detail as necessary in your campaign naming structure to ensure that anyone who views your account can clearly understand how the tags are structured.
  • Sales Enablement – Stay in the loop of new features that you may not have heard about, such as Search Brand Amplifier ad campaigns, which serve as an effective complement when leveraged alongside Walmart Sponsored Products campaigns.

Feel like you’re not ready for this major upcoming change on Walmart Connect from first to second-price bidding auction? Contact us today and we will walk you through all the changes to come and how to best prepare your product’s ads to ensure higher relevancy and lower costs.


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