Best Practices to Optimize Your Walmart Ad Campaigns and Maximize Ad Performance

As Walmart Marketplace continues to expand and attract a growing number of third-party sellers, mastering Walmart Connect’s advertising platform has become essential for driving sales and staying competitive. Whether you’re launching new campaigns or looking to fine-tune existing ones, strategic ad optimization is the key to reducing your advertising cost of sale (ACoS) and maximizing your return on investment (ROI).

This article covers best practices for optimizing Walmart ad campaigns including everything from behavioral targeting to campaign bidding strategies and new features like Target ROAS bidding. Let’s explore how to elevate your ad performance and generate more profitable results.

Understanding the Walmart Advertising Ecosystem

Walmart advertising solutions offer a powerful way for sellers to increase brand awareness, drive repeat buyers, and reach millions of Walmart customers. With a range of advertising solutions, including automatic and manual campaigns, sellers can choose the approach that best fits their business needs. The campaign creation process is straightforward, and Walmart provides tools and resources to help sellers optimize their campaign performance. By leveraging Walmart advertising, sellers can improve their product visibility, drive more sales, and maximize their return on ad spend.

Before diving into optimizations, it’s important to understand the different types of Walmart advertising available to sellers:

• Sponsored Products: Ads that promote individual products in search results and on product detail pages.
• Sponsored Brands: Top-of-search placements for brand-building with custom headlines, logos, and multiple products.
• Display Ads: Programmatic ads that appear throughout Walmart’s website, mobile app and in Walmart stores, allowing behavioral and demographic targeting.

Walmart uses first-party shopper data, which makes its ad targeting exceptionally powerful, especially when paired with Walmart’s omnichannel footprint and in-store influence. But to unlock this potential, sellers need to go beyond just setting up campaigns. As a Walmart Marketplace seller, you should utilize the detailed performance data in Walmart Ad Center to make data-driven decisions to optimize your ad campaigns, drive more sales, increase brand loyalty, and grow your business.

Top 10 Best Practices for Walmart Ad Campaigns

Let's dive into 10 effective campaign strategies to maximize your ad performance in 2025.

1. Set Clear Goals for Each Campaign

The first step in any successful ad strategy is knowing what you’re aiming for. Common goals include:

• Driving traffic to new listings
• Increasing sales velocity for top-performing SKUs
• Promoting seasonal products
• Improving brand visibility

Once goals are defined, choose the appropriate campaign type and targeting strategy. For example, Sponsored Products are excellent for driving conversions, while Sponsored Brands are better suited for top-of-funnel visibility.

2. Segment Campaigns by Product and Performance

One of the most common mistakes sellers make is lumping too many products into a single campaign. To manage campaigns effectively, segment campaigns based on:

• Product category or type
• Best-sellers vs. new products
• Margins and ACoS tolerance
• Seasonality or promotional timing

This segmentation allows you to tailor bids and budgets more effectively, track individual performance, and allocate spend to your top-converting products.

Pro Tip: Use campaign naming conventions that clearly identify goals and structure (e.g., “SP_HomeGoods_TopSKUs_Q3”).

3. Use Behavioral Targeting to Drive Higher Conversions

Walmart Connect offers rich behavioral targeting options through Sponsored Display ads. This is a powerful way to reach consumers who have already shown intent, either by viewing your product pages, similar items, or related categories. You can target users based on:

• Recent buyers
• Lapsed buyers (shoppers who interacted with your brand but did not purchase)
• Category specific purchase history
• Personas by Lifestyle and Life Stage (e.g., video gamers, new parents)
• Custom targeting by browsing behavior

Strategies for Behavioral Targeting:

• Retarget Product Viewers: Serve ads to "lapsed buyers" who’ve visited your listings but haven’t purchased.
• Conquest Competitor Viewers: Target customers browsing similar competitor products.
• Complementary Targeting: Promote your products to customers who purchased related items (e.g., target phone case shoppers if you sell screen protectors).

By serving ads to warm audiences, you improve click-through rates (CTR) and conversion rates, leading to lower ACoS.

4. Optimize Bids Based on Product Performance and Margins

Walmart uses a second-price auction model, meaning you pay just above the next highest bidder. But bid optimization is still critical to avoid overspending.

Bid Optimization Tips:

• Start with Auto Campaigns: Let Walmart identify high-performing keywords, then use that data to create manual campaigns.
• Adjust Bids by Performance: Increase bids for keywords and products with high conversion rates and strong ROI; decrease bids for underperformers.
  Factor in Profit Margins: A low-margin item may require a lower bid threshold to remain profitable.

Example: If your target ACoS is 20% and your product has a 40% margin, you have room to be competitive without risking negative returns.

5. Leverage Manual Campaigns for Keyword Control

While automatic campaigns are great for discovery, running campaigns effectively through manual campaigns gives you control over keyword targeting and budget allocation.

How to Maximize Manual Campaigns:

• Use Search Term Reports: Identify high-performing keywords from auto campaigns and transfer them to manual ones.
• Segment by Match Type: Break out campaigns by exact phrase and broad match types for more precise bidding.
  Negative Keywords: Exclude irrelevant terms to prevent wasted spend (e.g., exclude "cat" if you only sell products for dogs).

Regularly review keyword performance and refine your targeting strategy to ensure ad spend is going toward high-intent traffic.

6. Reduce ACoS by Improving Product Listings

Even the best-optimized ads won’t perform well if your product pages are weak. To reduce ACoS and boost conversion rates, your listings need to be optimized for Walmart’s algorithm and the shopper experience.

Listing Optimization Tips:

• Titles: Include relevant keywords while keeping titles readable and clear.
• Images: Use high-resolution images with different angles, lifestyle shots, and zoom functionality.
• Product Descriptions: Clearly highlight product features, use bullet points, and answer common shopper questions.
• Pricing: Competitive pricing significantly impacts conversions and Buy Box eligibility.

Products with a solid Listing Quality Score lead to higher conversion rates, which in turn reduces ACoS and increases your ad efficiency.

7. Monitor Campaign Performance and Make Data-Driven Adjustments

Walmart’s Ad Center provides detailed reporting on metrics such as impressions, clicks, conversions, ACoS, and ROAS (Return on Ad Spend).

Key Metrics to Monitor:

• ACoS (Advertising Cost of Sale): Total ad spend divided by attributed sales. Lower is better.
• ROAS (Return on Ad Spend): Attributed revenue divided by ad spend. Higher is better.
• CTR (Click-Through Rate): Indicates ad relevance and effectiveness.
• Conversion Rate: How well your ads turn traffic into sales.

Analyze this data regularly to identify trends, pause underperforming ads, and shift budget to top-performing segments.

8. Use Target ROAS Bidding to Maximize Profitability

Walmart recently introduced Target ROAS bidding, a powerful tool for advertisers looking to scale performance without sacrificing profitability.

What is Target ROAS Bidding?

Target ROAS automatically adjusts bids to help you reach a desired return on ad spend. Instead of setting manual bids, you tell Walmart the ROAS you want, and their algorithm manages bids to try and achieve that target. For example, if you set a Target ROAS of 5x, Walmart will aim to generate $5 in sales for every $1 you spend. According to Walmart, the majority of campaigns achieve at least 85% of their Target ROAS goals.

Benefits of Target ROAS Bidding:

• Automation: Reduces manual bidding tasks and reacts in real-time.
• Scalability: Ideal for large catalogs or campaigns where micromanaging bids isn’t feasible.
• Efficiency: Walmart optimizes bids based on shopper intent, seasonality, device, and time of day.

Best Practices for Target ROAS:

• Start with Historical Data: Analyze past campaign performance to set a realistic ROAS goal.
• Allow a Learning Period: The algorithm needs time to optimize, so avoid making drastic changes too soon.
• Use in High-Volume Campaigns: Target ROAS works best with consistent conversion data. Low-volume products may not provide enough signals.

By setting smart ROAS targets, you can control profitability while scaling successful campaigns more aggressively.

9. Diversify Your Ad Mix Across the Funnel

Effective Walmart ad strategies balance bottom-of-funnel intent (e.g., Sponsored Products) with upper-funnel awareness (e.g., Sponsored Brands and Display Ads).

Funnel-Based Ad Strategy:

• Top of Funnel: Use Sponsored Brands and Display Ads to build awareness and attract new shoppers.
• Middle of Funnel: Retarget visitors or competitor audiences with Display Ads.
• Bottom of Funnel: Use Sponsored Products for conversion-focused campaigns.

Diversification ensures you’re capturing interest at every stage of the buyer journey, not just when shoppers are ready to make a purchase.

10. Align Advertising with Inventory and Fulfillment

Advertising can only succeed if the operational side of your business supports it.

• Avoid Running Ads on Out-of-Stock Items: This leads to wasted dollars spent and a poor shopper experience.
• Use Real-Time Inventory Sync: Ensure ad campaigns are only active for in-stock and fulfillable products.
• Optimize Fulfillment: Fast shipping and Walmart Fulfillment Services (WFS) improve Buy Box win rate and conversion.

Aligning your ad strategy with fulfillment and stock availability ensures that every click has the potential to convert.

Advanced Advertising Strategies

Use Sponsored Videos

Sponsored Video ads are a key component of Walmart’s advertising solutions, allowing brands to tell their story and showcase their products in an engaging and immersive way. By leveraging video ads, brands can create an emotional connection with their customers, drive conversions, and boost sales. Walmart’s video ad solutions provide a range of benefits, including premium placement in search results, increased product visibility, and more control over ad targeting. To get the most out of video ads, sellers should focus on creating high-quality, engaging content that showcases their product benefits and resonates with their target audience.

Run In-Store Ads with Walmart Connect

Walmart Connect is a powerful platform that allows brands to connect with customers online and in-store, through a range of advertising solutions including digital screen ads, in-store audio ads, and onsite display ads. By leveraging Walmart Connect, brands can increase shopper attention and sales. Walmart Connect provides a range of benefits, including the ability to reach millions of customers, increase brand awareness, and drive conversions. To get the most out of Walmart Connect, sellers should focus on creating engaging, relevant content that resonates with their target audience.

Outsource with an Approved Solution Provider

If you're looking to grow your Walmart business but don’t have the time or expertise to manage your advertising campaigns, partnering with a Walmart-approved third-party solution provider can be a smart move. These partners offer professional advertising expertise that can often be a better return on investment than hiring and training an internal team. In fact, sellers who work with Walmart Connect Partners have seen returns on ad spend increase by as much as 28%.

Frequently Asked Questions

Here are some frequently asked questions about Walmart advertising:

• How do I create a campaign? To create a campaign, sellers should log in to Seller Center, navigate to the Growth Opportunities section and Click on Advertising. Follow the prompts to enroll in Walmart Connect where you will get access to the self-serve Walmart Ad Center. This is where you will create and manage your ad campaigns. Simply follow the prompts to set up a new campaign including choosing your ad type, setting your start and end date and your daily budget.
• What is the difference between automatic and manual campaigns? Automatic campaigns allow Walmart to determine when to display sponsored products, while manual campaigns allow sellers to choose the keywords they want to bid on.
• What is the cost of advertising on Walmart? The cost of advertising on Walmart varies depending on the campaign type, ad spend, and other factors. Sellers can set a daily budget or lifetime budget, and bid on keywords to control their costs.
• How do I track my campaign performance? You can track your campaign performance through Walmart Connect Ad Center, which provides metrics such as sales, revenue, and return on ad spend. You can evaluate results at-a-glance with the Sponsored Search and Display performance dashboards, view detailed campaign metrics, and optimize your campaigns to help meet your goals.

Final Thoughts

Walmart advertising has evolved into a robust ecosystem powered by real shopper data and sophisticated bidding tools. For sellers who invest the time and effort into campaign optimization, the rewards can be significant: lower ACoS, stronger ROAS, and scalable growth.

Recap of Key Takeaways:

• Set clear goals for each campaign.
• Segment campaigns by product type and performance.
• Leverage behavioral targeting for higher conversion rates.
• Use a mix of auto and manual campaigns for discovery and control.
• Continuously monitor performance metrics like ACoS and ROAS.
• Improve listings to support ad performance.
• Embrace advanced bidding strategies like Target ROAS for scalable efficiency.
• Diversify your ad strategy across the entire funnel.
• Stay aligned with inventory and fulfillment.
• Utilize a Walmart Connect Partner.

Walmart Marketplace is rapidly becoming one of the most promising growth channels for eCommerce sellers. By adopting these best practices, you’ll be positioned to make the most of your ad investments and capture more market share.