If you are already running Amazon ads, Walmart Connect Bidding may look familiar at first glance. It is still auction-based CPC advertising, but with key differences between both bidding systems you must consider before building tailored strategies for each platform.
Generally, bidding strategies on Walmart Connect work better when you respect how Walmart prices clicks in its auction, then build a test loop that quickly finds the clearing price and protects your margins.
Let’s see how second-price auctions play a relevant role in all of this and how to adapt your bidding strategy for Walmart.
About Walmart’s Second-Price Auctions
A second-price auction is an auction format where the winning advertiser typically does not pay their full max bid. Instead, the price is tied to the next strongest competitor, plus a small increment.
In plain terms, you can bid $3.25 and still pay less than $3.25 if the next best competing bid is lower. This means the auction is designed so your max bid serves as a ceiling. It is never a guaranteed price.
Both Amazon and Walmart run second-price auctions, only with noticeable differences.
Walmart is clearer on how this mechanism works within their platform. In fact, they describe their bidding model as an “advanced second-price auction”.
The official documents state that the platform runs a real-time auction to decide which ads appear, with the most relevant product and bid winning, and the cost per click is determined by considering the bids of other relevant ads.
Walmart also says the winner pays only the amount necessary to win, based on competing bids, which, as mentioned earlier, may be less than the winner’s maximum bid.
What Walmart’s Advanced Second-Price Auction Changes for Bidding
Walmart explicitly states that relevancy and bid work together to determine the winner, and the actual CPC is set after considering other relevant bids.
That has two immediate implications in day-to-day management:
- First, you can justify bidding “into the auction” to learn the clearing price, because you are not automatically paying your max bid. You still need a ceiling based on margin, but you do not have to start with lower bids that don’t win impressions.
- Second, relevancy becomes part of your bid efficiency. If you are forcing a keyword that is only loosely aligned with the item, you can be priced out even at bids that “should” work, because Walmart is selecting the most relevant product and bid combination.
Walmart will always give you a suggested bid for each keyword in your campaigns. You can choose to follow it or not:
At Walmart, just as with Amazon, suggested bids are based solely on market price and the value of the products associated with each keyword. This means that they’re not set in stone, and you do not have to follow them exactly.
In the screenshot above, you can see how each keyword is a case on its own, where some bids exceed the suggested bid by 50% of even more, while others are much closer to it.
How to calculate the initial bid, then? Well, it depends. The maximum profitable bid, or bid ceiling, is a calculation each seller must make based on their needs, objectives, and available resources. It is simply a personal answer that requires intimate knowledge of the business data.
The Walmart Connect bidding playbook
Walmart is explicit that the winner is not just the highest bidder. It is a combination of relevance and bid, and the CPC is set by comparing other relevant bids.
That changes how you should treat early bidding.
If you start too low, you do not clear the auction, you do not get impressions, and you do not learn. On Walmart, that can quickly stall a campaign.
If you start higher in a controlled test, you can clear the auction, capture real CPC, and then walk bids down to the minimum bid that still maintains the visibility you need.
Here’s how to do it:
Step 1: Launch Campaign to Learn the Clearing Price
Your first goal is to get enough impressions or clicks to understand whether Walmart is showing you to customers for the bid you’ve chosen.
If your bid is too low, your ad won’t show, and that will be reflected in your impressions. It simply means that you’re not winning the auction.
Walmart’s algorithm points sellers toward using keyword tools and performance reporting to expand coverage and then increase bids on keywords that can drive more discovery. That only works if you are actually clearing auctions and collecting data.
What this looks like in practice is setting initial bids closer to the upper end of your bid ceiling, as mentioned earlier, for your highest-intent keyword candidates. Once you have a signal, you gradually lower the bid.
In general, the lowering of the bid is 20% or 25% at most. Of course, it depends on the case.
Keep in mind that the bid ceiling may be disregarded when the primary objective is to rank a product on a specific, highly competitive, and relevant keyword… even if it means minimal profit or breaking even in the short term.
This strategy is adopted because ranking for dominant keywords provides a long-term advantage, despite a short-term compromise in immediate profitability.
That said, we recommend waiting for a day or two to get enough impressions. After that, it is time to decide.
Step 2: Optimize by Separating the Winning Keywords
After you have the data, use Keyword Performance Reports to separate targets into three groups:
- Profitable: Winning keywords. They must be relevant to the product.
- Promising: Keywords with potential to generate sales.
- Waste: High spend and low clicks.
Identify the keywords driving both volume and acceptable return, then increase bids on those winners to scale.
If a keyword is generating a lot of clicks without results, that is usually a sign you are overpaying for that traffic. Look at it in the context of your budget and spending.
For example, if a campaign has a $10 daily budget, spends $7 to $8, and gets 10 to 15 clicks with no sales, your next move is to reduce the bid or pause that keyword. The option you choose depends on relevance.
If the keyword is highly relevant to the product, lower the bid first and give it a short window to prove it can convert at a cheaper CPC. If the keyword is loosely related, it is usually better to drop it and reallocate that spend to more precise targets.
- Note: Walmart recommends increasing bids for high-performing keywords to win more impressions and accelerate growth.
You can use Walmart’s Custom Reports to see exactly how your bidded keywords are performing.
Just like with Amazon, you have a long list of factors (Measures and Dimensions) you can add to the Report so that you get the best possible results according o your needs.
The screenshot above is specifically configured to show only performance. If you want to see specific outcomes, add metrics such as Orders, Units Sold, Sales, Conversion Rate, and Average CPC.
Step 3: Scale With Placement Controls After You Have the Winners
There are different strategies to scale a campaign.
But once you have stable winners, you can generally scale without destroying efficiency by using Walmart’s placement multipliers.
Placement multipliers come after you have a winning bid. They should not be your first fix for poor performance:
How Amazon Ads are Different From Walmart Connect
Amazon’s ad system is much more sophisticated than Walmart Connect.
First of all, Amazon’s second auction system allows bidders to place a certain amount but only pay one cent more than the second-highest competitor’s bid, providing an advantage when considering budget expenses.
On the other hand, there’s the fact that Amazon lets you add negative keywords to prevent your ads from showing on specific search terms. This does not affect organic ranking. It only filters paid traffic by blocking impressions and clicks for irrelevant or unprofitable terms.
Negative keywords are one more tool Amazon sellers have that, when used efficiently, has the potential to save quite a bit of resources in the longrun.
However, the sheer size of Amazon’s sellers and customer base is very different from Walmart’s. That scale changes how competitive auctions feel, how fast CPCs move, and how quickly you can generate meaningful data.
Amazon also gives you more control over how your bids behave. In Sponsored Products, you can choose bidding strategies that let Amazon raise or lower your bids in real time based on conversion likelihood. That means your “set bid” is not always the bid Amazon uses in the auction for every impression.
If you copy an Amazon setup without adjustments, you will often either start too conservative and never clear the auction, or overspend before you have clean winners.
That is why Walmart requires its own playbook. You need a tighter method for discovering the clearing price, along with controlled bid adjustments.
Conclusion
Previous work at Amazon gives a useful background, but it can also plant practices that hurt results at Walmart.
After all, Walmart delivers its strongest performance when sellers leave assumptions behind and operate a playbook that is tailored to the platform.
Walmart Connect Bidding Strategy FAQs: CPC, Clearing Price, and Auction Mechanics
What is a second-price auction in Walmart Connect?
A second-price auction means your bid acts as a ceiling, not the actual price you pay.
In practice, Walmart determines your CPC based on the next most competitive relevant bid, not your max bid. That gives you room to bid more aggressively to win impressions without always paying that full amount.
Where most sellers get this wrong is assuming higher bids automatically mean overpaying. On Walmart, the bigger risk early on is underbidding and never clearing the auction, which leads to no impressions and no data to optimize against.
Does Walmart always choose the highest bid?
No. Walmart explicitly prioritizes a combination of relevance and bid, not bid alone.
That means even if you outbid competitors, you can still lose the auction if your product is not closely aligned with the search intent. On the flip side, a highly relevant product can win placements at a lower effective CPC.
This is why forcing broad or loosely related keywords often leads to wasted spend. The system is designed to reward alignment, not just aggressiveness.
What is the clearing price and how do you find it?
The clearing price is the minimum CPC required to consistently win impressions for a keyword.
You do not see this number directly in Walmart Connect. You find it through controlled testing:
Start with a bid near the upper end of your acceptable range to ensure you clear the auction. Once you begin getting impressions and clicks, gradually reduce bids in controlled increments until volume drops off.
That drop-off point is your signal. It tells you where visibility starts to break, which is critical for dialing in efficiency without sacrificing traffic.
Should you follow Walmart’s suggested bids?
Suggested bids are a reference point based on market competition, not a profitability target.
They can help you enter the auction quickly, especially during launch, but they do not account for your margins, conversion rate, or long-term goals.
A practical approach is to use suggested bids to get initial visibility, then adjust based on actual performance. Your real ceiling should always come from your numbers, not the platform’s estimate.
How do you know if your bid is too low?
The clearest signal is a lack of impressions.
If your campaign is not generating visibility, it usually means you are not clearing the auction. At that point, increasing the bid in a controlled way is the fastest way to diagnose whether the issue is bid-related or relevance-related.
Many campaigns stall because sellers try to “optimize” before they have enough data. If you are not getting impressions, you are not in a position to optimize yet.
How long should you wait before adjusting bids?
You need enough data to make a decision, but not so long that you waste spend.
A practical window is one to two days for initial signal, assuming you are generating impressions. Once you have a baseline of clicks and early performance, you can begin adjusting in controlled steps.
The key is to avoid constant changes. Make a move, observe the impact, then adjust again based on what the data is telling you.
When should you lower bids versus pause a keyword?
It depends on relevance.
If a keyword is highly relevant but not converting, the first step is usually to lower the bid and test whether it performs at a lower CPC.
If the keyword is loosely related and driving spend without results, it is typically better to pause it and reallocate that budget toward stronger, more aligned targets.
This keeps your spend focused on traffic that has a real chance of converting.
Why do some Walmart campaigns fail to scale even with sales?
In many cases, scaling breaks because sellers try to increase budget without reinforcing what is already working.
The right approach is to identify winning keywords first, then increase bids on those specific targets to capture more volume. Only after that should you layer in placement multipliers or broader expansion.
Scaling without clear winners usually leads to higher spend without a corresponding increase in efficiency.
When does it make sense to bid above your profitability target?
There are situations where short-term efficiency is not the primary goal.
If you are trying to rank on a highly relevant, high-volume keyword, it can make sense to bid more aggressively, even at break-even or slight loss, to build visibility and organic momentum.
The key is being intentional. This is a strategic decision, not a default approach. Once ranking improves, bids should be adjusted back toward profitability.
How is Walmart Connect bidding different from Amazon Ads?
While both platforms use second-price auctions, execution is different.
Amazon provides more automation, including dynamic bidding and negative keywords, which allow for more control over traffic filtering.
Walmart requires a more hands-on approach. You need to actively discover the clearing price, manage bids in tighter increments, and rely more heavily on relevance to win auctions efficiently.
If you apply an Amazon strategy without adjusting for these differences, you often end up either underbidding and getting no data or overspending without clear results.
Ready to Get Control of Your Walmart Connect Bidding?
Running Walmart ads without a clear bidding strategy often leads to the same outcome. Either you bid too low and never gain traction, or you bid too high and watch margins disappear without a clear path to scale.
The difference comes down to understanding how the auction actually works and having a structured way to find your clearing price, identify winning keywords, and scale what is already converting.
By filling out the form below, you are taking the first step toward a more controlled and predictable Walmart advertising strategy. One built around real data, not guesswork.
We will take a look at how your campaigns are currently bidding, where spend is being wasted, and where there is opportunity to improve visibility without inflating your CPC.
From there, you will walk away with a clearer plan on:
- Which keywords deserve higher bids
- Where your current bid ceiling may be limiting growth
- How to scale without sacrificing profitability
Share a few details about your business, and one of our marketplace strategists will reach out with insights tailored to your account.
No pressure. No generic recommendations. Just a focused conversation around what is actually happening in your Walmart Connect campaigns and where to go next.
Fill out the form below to start building a bidding strategy that works.