The news: Walmart Connect introduced negative keywords for Sponsored Product ads in late July, enabling advertisers to exert more control over their ad spending and use budgets more efficiently.

The feature is now available for manual and automatic campaigns that use fixed bidding. Advertisers can choose between negative exact-match keywords, which block ads from showing when customers’ searches are an exact match for the chosen terms, or negative phrase-match keywords, which prevent ads from appearing when searches contain the full phrase in the exact order.

Why it matters: The ability to exclude keywords will enable brands to better determine incrementality and reduce wasteful ad spending. Companies can use the feature to identify low-performing search terms, as well as concentrate ad dollars on more desirable keywords to boost visibility. For larger brands, the feature offers the opportunity to better control and understand how multiple products may be competing for the same search terms or branded traffic.

The negative keyword feature allows brands to be more intentional about their Walmart Connect spending, but they may not like the initial results. Advertisers were previously unable to exclude branded searches, meaning that many were spending money to reach shoppers who were already on their way to purchase their products, resulting in what appeared to be a more favorable return on ad spend (ROAS). While the new capability means that brands can focus on more desirable search terms and avoid duplicative spend, it could also reduce ROAS in the short term, which may cause some companies to question their Walmart Connect investments.

Implications for retail media: Advertisers have been asking Walmart for negative keyword capabilities for years. Its decision to make the change now reflects the pressure that all retail media networks —even those with the scale and influence of Walmart—are under to deliver more precise targeting and measurement. Roughly three-quarters (74%) of US advertisers consider targeting, measurement, and attribution to be important or very important when evaluating commerce media networks, according to a McKinsey report.

Making search advertising more efficient could also drive gains for the rest of Walmart’s retail media business by shifting budget to upper-funnel offerings like CTV.