As retail media networks evolve, non-endemic advertising presents significant opportunities for retailers and brands to expand their networks to feature a growing range of advertisers. That’s no small opportunity, as US retail media ad spend is projected to hit $62.88 billion in 2025.
Here’s what to know about this emerging growth driver.
What is non-endemic advertising?
Non-endemic advertising is a retail media strategy where retailers sell ad space to advertisers promoting products or services not sold by that retailer. It expands inventory beyond products directly sold by the retailer to complementary offerings.
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“If I’m the Home Depot and I’m serving a barbecue sauce ad next to a grill product, that might be a non-endemic advertisement,” ĢAV analyst Sarah Marzano .
This strategy is gaining traction in the retail media landscape, but it’s still in its early stages.
Current non-endemic advertising trends
While select retailers like Amazon and Walmart have incorporated non-endemic advertising into their retail media mix for years, its adoption is not widespread.
Large, multicategory retailers have the strongest value proposition for non-endemic advertisers. Their large volume of customer data allows advertisers to create highly targeted, qualified audiences.
Retailers are testing various non-endemic advertising approaches, including on-site, in-store, and off-site formats. While on-site ad inventory is typically the foundation for retail media networks, some retailers limit non-endemic ads to off-site environments. Others may allocate on-site real estate to non-endemic ads but often restrict it to the post-purchase environment.
Recent developments include:
- In March 2023, in automotive, entertainment, financial services, quick-service restaurants, and travel categories.
- Home Depot also expanded its retail media offerings to non-endemic advertisers that month.
Where can non-endemic ads appear?
Non-endemic ads can appear in two main areas:
- On-site: Retailer websites, apps, and
in-store placements - Off-site: Using retailer data to target audiences across other websites and platforms
What are the benefits of non-endemic advertising?
Non-endemic advertising offers benefits for both retailers and advertisers:
- Opening up ad inventory to non-endemic brands provides a new revenue stream for retailers, especially as endemic brand advertising reaches saturation.
- Advertisers can leverage retailers’ first-party data to create highly targeted, qualified audiences.
- When done well, non-endemic ads can complement the shopping experience by promoting relevant products and services.
- Brands can access new audiences and retail environments.
“I think the value of retailers’ first-party data has been more than proven by the success we’ve seen from retail media networks over the past decade or so, and obviously increasingly over the past few years,” said Marzano.
