“You’ll notice that we don’t sell the No. 1, 2 slots in search — like some of our competitors do,” he said at Recode’s CodeCommerce conference that year, positioning Walmart.com as the anti-Amazon in its approach to search results.

Six years later, that line has all but faded. Sponsored listings now routinely appear at the top of Walmart’s search results, pushing organic products further down the page. It’s a shift that mirrors the evolution of Amazon’s marketplace, where paid placements have become a core part of the shopping experience and a crucial profit engine. 

Walmart has become an ad-selling machine in its own right, fueled by brands eager to buy visibility on the nation’s second-largest e-commerce site. Walmart CFO John David Rainey told investors late last year that advertising had grown to make up almost a third of Walmart’s overall operating income. The company generated $4.4 billion in global ad revenue in 2024, up 27% year-over-year, making it one of Walmart’s fastest-growing businesses, alongside its e-commerce unit.

Walmart’s ad business may lag Amazon’s in sheer revenue — Amazon pulled in $56 billion last year. But when it comes to how saturated their search results are with sponsored listings, the two are nearly indistinguishable, according to an analysis of around two dozen product searches conducted by Modern Retail.

Take a recent Walmart.com search for “batteries.” At the top of the page, two banner ads — one for Duracell, another for Rayovac — appear before any product listings. Scroll down, and about a quarter of the first-page results are sponsored placements from major battery brands, including Duracell and Energizer. The first organic listing from a non-advertising brand doesn’t show up until the ninth slot.

For comparison, roughly 24% of first-page search results for “batteries” on Amazon.com were sponsored listings — indicating that Walmart’s ad load is now broadly in line with its competitors.

Sponsored listings are particularly prevalent in categories where Walmart sells its own private-label products, such as apparel. In a recent search for “women’s shirts,” about 20% of first-page results were sponsored ads. The first organic listing didn’t appear until the thirteenth slot, following paid placements and items from Walmart-owned brands like Time and Tru and No Boundaries.

According to retail analytics firm Pentaleap, sponsored listings appear in 97% of Walmart searches, nearly matching Amazon’s coverage. The report also found that about a quarter of Walmart’s sponsored listings appear above the fold, while roughly half sit mid-page — a layout nearly identical to Amazon’s.

That evolution has taken shape under Seth Dallaire, Walmart’s chief growth officer and a former Amazon ad executive. Since joining Walmart in 2021, he’s applied the “flywheel” approach he helped refine at Amazon — using advertising to drive marketplace growth, and vice versa.

Walmart first began experimenting with ads above organic listings in 2020, according to Marketplace Pulse. Khurrum Malik, vp of marketing at Walmart Connect, said the company has taken a “phased approach” to its ad inventory over the years.

“We show a mix of sponsored and organic results designed to be relevant to each customer, using AI and machine learning, to make product discovery even easier for our customers,” he said. “Sponsored search ads appear alongside organic searches but can vary by factors like product category or type of search. We continue to test new ways to serve dynamic ads to make sure we get the customer experience right, meaning different customers may see a different combination of ads at any given time.”

Pay to play

Sponsored ads work much like an auction. Brands bid to have their products appear when shoppers search for specific keywords, with the highest bidders typically earning the most prominent placements. For instance, a brand like Duracell can pay for its batteries to appear at the top of results when someone searches for “batteries” — or even when they search for a rival brand like “Energizer.” The model lets retailers monetize their search traffic while giving brands a way to buy visibility in an increasingly crowded marketplace.

“Brands want the ability to be at the top of a page,” Andrew Waber, marketing senior lead at advertising agency PMG, told Modern Retail. For certain terms, he said, the top three sponsored results may capture one-third of total conversions.

As a result, brands are paying to play. Spending on sponsored products in Walmart’s search increased 53% in the fourth quarter of 2024 compared with a year earlier, according to data from marketing agency Tinuiti.

For those willing to bid on sponsored ads, Walmart’s search advertising may be worth the price. In a Walmart Connect blog post, the retailer claimed sponsored search has delivered a 56% average lift in return on ad spend for both first-party suppliers and third-party sellers.

Despite the growth of sponsored ads on Walmart’s website, the experience doesn’t seem to be materially diminishing the online shopping experience. If that were the case, it would show up as “declining retail sales, or e-commerce sales, or things of that nature,” but that hasn’t happened, according to retail media industry analyst Andrew Lipsman of Media, Ads + Commerce. In August, Walmart reported that its U.S. e-commerce sales increased 26% during the second quarter.

“From a consumer experience standpoint, the crucial factor in avoiding friction with sponsored search ads is ensuring they are contextually relevant,” said Sarah Marzano, an analyst at eMarketer. “Consumers tend to be more receptive to advertising in retail contexts than they are in other environments.”