What is Endemic vs Non-Endemic Retail Media Advertising?

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For years, media buying centered on the idea that only people interested in a specific industry or product would visit certain websites. The publisher or site itself had to contextually align with the topic of your ad – otherwise known as endemic advertising placements.

As consumer data and audience insights have evolved, advertisers have begun to view ad placements how they view consumers — multifaceted. We now know that ads don’t need to only appear against certain topics, categories, or content. We can use targeting and data analytics to reach the right consumers, no matter where they browse. This shift has positioned non-endemic retail media advertising at the forefront of media buying.

So, if you’re wondering which tactic – endemic or non-endemic advertising – is suitable for your brand, keep reading as we’ll dive further into what these terms mean, their benefits, and how to incorporate them into your media playbook.

What is Endemic Advertising?

The term ‘endemic’ is defined as native or natural to a specific environment or its surroundings. When taken in the context of advertising, it refers to ad placements that are contextually relevant or native to the market in which they are placed.

This is an especially fruitful tactic when buying ad space within retail media networks (RMNs). Suppliers —  whose products are available on the retailer’s website, pay for ad space within the retailer’s network (website, app, emails, etc) —  to promote their products within the customer shopping experience.

How Endemic Retail Media Advertising Works

Retail endemic advertising is the primary format by which ads are bought and sold within RMNs. Take Walmart’s DSP, for instance. Brands who sell their products at Walmart gain access to exclusive first-party ‘Walmart Connect’ data and in-market audiences (Walmart Connect) to reach shoppers at every stage of the shopping journey. They provide premium behavioral and audience data for brands to target consumers, such as previous buyers or in-market shoppers.

Additionally, this exclusive partnership gives brands access to premium endemic ad placements within the shopping journey. Brands can highlight their products at the top of search results on Walmart.com or use sponsored product carousel ads within the Walmart app, to name a few examples. The ad formats themselves lend to a simple path to purchase with features such as ‘add to cart’ and ‘buy now’ highlighted directly within the ad.

As consumers have diversified where and when they shop, RMNs have stayed in step, offering ad placements beyond their websites and apps. Walmart, for example, offers endemic advertisers opportunities to advertise across their social media pages, across their email marketing, or with in-store displays.

Endemic advertising’s structure is simple yet effective. Shoppable ad formats directly within retailers’ networks enable brands to reach active shoppers interested in their products with straightforward click-to-purchase formats.

Benefits of Endemic Retail Media Advertising

The benefits of endemic advertising for advertisers are rooted in the system’s structure. Brands can access exclusive ad placements to connect with consumers while they are in an active shopping mindset. It enables them to create more relevant ad campaigns tailored for shopping audiences.

One might wonder why retailers are willing to display ads as they might distract from the shopping experience. Simply put: offering ad space across the network provides an additional revenue stream beyond retail sales. However, the benefits of endemic ads are more than an opportunity to drive dollars.

Shopping is inherently a discovery process; consumers seek new products to try or compare to others. Because these ads use first-party audience targeting, the retailer knows the consumer will be interested in the brand or product. So, the suggested products and ads tailored to individual customers create a personalized, relevant shopping experience. Happy consumers are always a win for retailers.

Amazon’s Shift to Non-Endemic Retail Media Advertising

Traditionally, ad inventory on Retail Media Networks (RMNs) was exclusively available to brands selling their products or goods on the respective retailers’ sites. Since its advent, brands and retailers have benefited from this highly successful and symbiotic relationship. This is why industry experts were thrown a curve ball with Amazon straying from the mold.

During the Amazon ‘Unboxed’ Conference in October 2022, the eCommerce giant announced that non-endemic brands could start purchasing sponsored display ads on their website. With solutions at the ready, Amazon solidified its ambition to expand its advertising services beyond CPG and endemic clients.

This announcement marked a significant shift within RMNs, opening a whole new world of opportunities for advertisers who don’t sell products or services on retailer websites.

What is Non-Endemic Retail Media Advertising?

Non-Endemic retail media advertising refers to using retailer ad space to promote a product or service not sold by the retailer by identifying attributes of a retailer’s main or best customers. The retailer can then sell ad space on their website to non-competitor brands whose audience overlaps or mirrors theirs.

How Non-Endemic Advertising Works and its Benefits

GoPuff, a food and consumer goods delivery company, allows advertisers to reach consumers using sponsored product ads and product features in promotions.

While sponsored products and product features are better suited for endemic advertisers, the company recently expanded its advertising capabilities to appeal to non-endemic advertisers. Companies that don’t sell products within the GoPuff platform can now target the platform’s 2.6 million active users with “ads at checkout.”

The key to successful non-endemic advertising is to find considerable overlaps in the audience base. For GoPuff, Hulu was the perfect partner for a launch campaign. GoPuff’s core audience group consists of males, between 25 and 34 years of age, living on their own or with roommates in major cities throughout the US. While GoPuff doesn’t offer TV streaming services, this audience overlaps perfectly with the cord-cutting demographic Hulu works to convert to subscribers. And so far, these platforms are seeing success, with an engagement rate of 5% during the first month of the partnership.

This approach presents GoPuff — and other retailers — with valuable opportunities.Because GoPuff doesn’t offer the service, it runs no risk of lost business. However, by enabling non-endemic advertisers to purchase its ad inventory, GoPuff diversifies its revenue stream with online ad revenue. As for non-endemic advertisers, they reap all the same benefits of endemic ads alongside the ability to access previously unavailable inventory. This helps diversify their digital marketing strategy to reach shoppers during every stage of the buying journey. Furthermore, non-endemic retail media advertising enables brand discovery for consumers, opening doors to new companies, products, and services that may have otherwise gone unnoticed.

Digilant’s Endemic and Non-Endemic Ad Solutions through Premier Retail Media Networks

Endemic and non-endemic retail media ads provide advertisers with excellent opportunities to get their products or services to the right audience at the right time. Furthermore, they’re a powerful solution to engage with consumers today and in a cookieless future.

If you’re interested in learning more about these retail media advertising opportunities or access to retail media networks, we’re happy to chat.

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