Will Ads Be Disruptive or Beneficial to Conversational Commerce?
Walmart Inc. is experimenting with advertising inside its new AI shopping agent, Sparky, exploring how to monetize chatbot-guided shopping and catch up to Amazon’s Rufus AI assistant.
The retailer tested potential ad formats from September to early November, and is now considering how to proceed, the Wall Street Journal reported last week.
One possible format is a “sponsored prompt” that, when clicked by the user, responds with an answer and a click-to-buy ad. According to a sales presentation viewed by the WSJ, the new ad units leverage Sparky’s conversations for “brand engagement and personalized product recommendations,” marking a departure from the static display ads that currently populate e-commerce sites.
Introduced in June in an update to Walmart’s mobile app, Sparky summarizes customer reviews, compares products, and suggests items meeting various needs via a ChatGPT-style interface.
The ad test comes as agentic shopping, or shopping powered by AI agents that act autonomously on behalf of users, promises to reshape online shopping.
A new study from Adobe Express, based on a survey of 503 business leaders and 504 consumers, found half of all leaders believe AI tools will replace traditional search engines as the primary source of lead generation within five years. Among the consumers surveyed, one-in-five now uses generative AI at least weekly to discover new products, with Gen Z leading at 28%.
Walmart in mid-October announced a partnership with OpenAI to enable direct purchases inside ChatGPT in another move to embrace the shift toward agentic shopping.
“For many years now, eCommerce shopping experiences have consisted of a search bar and a long list of item responses. That is about to change,” said Doug McMillon, Walmart’s president and CEO, at the time. “There is a native AI experience coming that is multi-media, personalized and contextual. We are running towards that more enjoyable and convenient future with Sparky and through partnerships including this important step with OpenAI.”
The push into AI advertising come as Walmart’s high-margin ad business has been experiencing accelerated growth — and agentic AI also promises to reshape online advertising. Instead of bidding on keywords, advertisers will compete to appear alongside AI-generated answers in contextually relevant ways.
Walmart’s Not Alone in Introducing Ads Into Conversational Commerce Channels
The WSJ article indicated that the Sparky test ads have been seeing low click-through rates, but advertisers have shown high interest in exploring impacts from agentic shopping.
Amazon also recently added sponsored prompts to its AI-powered shopping assistant, Rufus, in North America, according to the WSJ report.
Amazon CEO Andy Jassy, on a quarterly analyst call in late October, said customers using Rufus during a shopping trip are 60% more likely to complete a purchase — and that the tool is on track to generate more than $10 billion in incremental annualized sales. Rufus now connects to 250 million active customers.
Lastly, reports arrived in April that Google was now showing ads within conversations produced by AI-powered chatbots, expanding its AdSense of Search tool beyond traditional websites and search results. In October, Meta announced that users’ chats and interactions with Meta AI would soon be used to target them with even more personalized ads.