The Perfect Retail Media ROAS Could Be Hiding a Problem – InformaBTL

A small change within Walmart Connect has just touched one of the most sensitive nerves in retail media: the difference between generating a sale because of advertising and attributing to advertising a sale that probably would have happened anyway.
Walmart Connect has begun allowing advertisers in the United States to use negative keywords within Sponsored Products. Since July 29, 2026, brands have been able to prevent their ads from appearing when certain searches match terms they have previously chosen to exclude. The functionality is available for both manual and automatic fixed-bid campaigns and includes negative exact and phrase matching.
At first glance, this looks like a basic optimization tool. In reality, it could force brands, agencies and marketing executives to confront something far more uncomfortable: how much of the extraordinary ROAS they have presented in performance meetings for years actually represented incremental sales.
Sponsored Products places promoted items within search results, browse pages and other Walmart placements. The model operates on a cost-per-click basis and enables advertisers to reach consumers who are already exploring products within a shopping environment. Until now, one of the limitations cited by advertisers was the lack of sufficient control to prevent certain automated campaigns from appearing against specific searches.
With negative keywords, a company can tell the system not to display its ad when a particular query is irrelevant to its objectives. Walmart says the feature is designed to reduce less valuable traffic, improve budget efficiency and prevent conflicts between products or brands that could end up competing for the same searches.
The most obvious benefit appears when the algorithm associates a product with confusing or irrelevant terms. Pacvue, for example, notes that a brand can prevent an automated campaign from spending money on searches it does not need to capture, or even on terms associated with its own flagship product. But that is where the truly interesting part begins.
Suppose a shopper enters Walmart and directly types the name of a well-known brand. The intent already exists. That consumer is not asking which product to buy; they are specifically searching for a brand they probably already know, are considering or may even have decided to purchase before seeing any advertisement.
If that company pays to place a Sponsored Product in front of that search and the consumer subsequently completes the purchase, the platform may attribute the sale to the ad, depending on its measurement rules. The ROAS can look extraordinary. The problem is determining whether the advertising actually generated the sale or merely appeared in front of a decision that was already almost made.
Modern Retail reports that advertisers had been asking Walmart for greater control over these searches for years. Chris Sheldon, an executive at consulting firm Podean and one of the earliest users of Walmart Connect, told the publication that branded search terms are among the least incremental forms of advertising precisely because consumers are already actively searching for that name. The new tool now makes it possible to test that hypothesis.
A company can exclude certain branded searches from specific campaigns and redirect the budget toward generic terms, category searches or consumers whose purchase intent has not yet been established. Then something apparently contradictory can happen: the campaign may become a better investment while its ROAS gets worse.
This is probably the consequence that should concern marketing teams the most. Modern Retail cites specialists who expect some brands to see a decline in return on ad spend after removing part of the investment allocated to branded searches. The reason is simple: these terms normally convert very well because they capture consumers with high purchase intent. Eliminating that advertising can cause average ROAS to decline. However, the budget that is freed up could instead be used to attract shoppers who are still considering several brands, capture category searches or generate genuinely new sales.
In other words: a ROAS of 10 may be less valuable to the business than a ROAS of 6 if the first is largely composed of consumers who would have purchased anyway, while the second is generating genuinely incremental customers.
This exposes one of the most dangerous paradoxes in contemporary advertising measurement. For years, the industry has trained its teams to reward the highest metric. But optimizing exclusively for ROAS can encourage platforms and advertisers to concentrate investment on the consumers who are easiest to convert, rather than on those whose behavior can actually be changed through advertising.
The result is a perfect circle in Excel: strong conversion rates, excellent attributed returns and flawless presentations for senior management. Incremental growth may tell a very different story.
Walmart’s move also illustrates the maturation of retail media. Retail media networks built much of their appeal around a powerful promise: connecting advertising exposure with sales using retailers’ own first-party data. That solved one of advertising’s historic problems, but attribution does not automatically equal causation.
Knowing that someone saw an advertisement and later purchased the product does not, by itself, prove that the person bought it because of that ad. This is precisely where incrementality becomes important: it attempts to answer what would have happened if the advertising had never existed.
The arrival of negative keywords allows advertisers to make more precise decisions about which traffic is actually worth paying for. Pacvue says brands’ average daily spending on Walmart Sponsored Products increased 25% year over year during the second quarter of 2026, while CTR rose 23%, making it even more important to manage precisely where that investment flows.
Greater efficiency in Sponsored Search could also free up resources for formats higher in the funnel, such as connected TV, awareness or consideration campaigns, something specialists interviewed by Modern Retail identify as a potential consequence of the new feature.
 
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