What factors are driving momentum for non-endemic advertising?

• Retailers’ first-party data has value that extends beyond endemic brands. With the success of retail media playing out under the looming shadow of third-party cookie deprecation, retailers are well positioned to make a case for the value of their data for non-endemic brands. In an April 2024 report by LiveIntent, more than 8 in 10 (84%) US marketers said they are more likely to invest in retail media because of third-party cookie deprecation.
• The transaction-based data retailers collect over time enables them to create highly targeted audiences.Reaching audiences with proven purchase behavior holds appeal for advertisers that want to ensure the efficacy of their digital ad spend. And retailers with well-developed loyalty programs are especially well positioned to create qualified audiences, given their even deeper insights and knowledge about their customers.
• Non-endemic advertising has the potential to help retailers of all sizes overcome barriers to scaling revenues. Large retailers operating in commodity categories such as consumer packaged goods (CPG) are often competing for advertising budgets from the same pool of endemic advertisers, while smaller specialty retailers have fewer endemic advertisers to choose from in the first place. Extending ad inventory to non-endemic advertisers is one way to broaden the pool of potential revenues.
• Retailers’ owned and operated properties provide greater security for advertisers. Ads that appear alongside risky content or fake news are among the biggest media challenges facing US publishers, according to a September 2023 study from Integral Ad Science and YouGov. But ads on retailers’ owned properties, whether digital or physical, provide advertisers with a high degree of confidence in the contextual safety of the surrounding content.
• Retail media’s off-site and up-funnel shift has created more available ad inventory. Off-site ad spend is forecast to grow at a faster rate than on-site through 2028, and it will represent more than 20% of total retail media ad spend by 2025. Consequently, many retailers are finding themselves with an increased supply of ad inventory free from the constraints of their finite, on-site digital real estate.
• The emergence of commerce media will increase the prevalence and practice of non-endemic advertising. Verticals outside of retail, such as financial services (e.g., Chase, PayPal) and travel (e.g., Lyft, Expedia), are increasingly leveraging their first-party transaction-based data to launch media offerings of their own. Non-endemic advertising is a natural fit for sectors that have access to purchase-based data but don’t sell products directly to consumers.

Read the full report, Non-Endemic Advertising Explainer 2024.