Endemic vs. Non-Endemic Advertising in Retail Media -- What's the Difference?

Retail media has evolved beyond the traditional boundaries of product placement, leading to distinct strategies like endemic and non-endemic advertising. As digital out-of-home (DOOH) advertising expands, understanding the differences between these two methods becomes crucial, particularly for brands seeking to optimize their retail media approach.

What is Endemic Advertising?

Endemic advertising refers to ad placements that are contextually relevant to the environment or setting in which they are displayed. These ads promote products or services that are directly related to the location where they appear, naturally aligning with the consumer’s immediate interests of activities.

Endemic advertising typically involves products being advertised on platforms where they are sold. For example, when a brand places an ad for its sports equipment in a sporting goods store or displays grocery products in a supermarket’s app, this is endemic advertising.

Examples of Endemic Advertising:

• Health and Beauty in Pharmacies: A pharmacy promoting skincare products on digital screens throughout the store is an endemic example, as the audience is likely already there to shop for personal care items.
• Gaming Consoles in Electronics Stores: Ads for gaming consoles or accessories shown on screens in electronics stores target an audience that is already likely to be interested in tech and gaming.

These ads blend into the shopping experience, enhancing the consumer’s in-store journey by being both relevant and timely. 

What is Non-Endemic Advertising?

Non-endemic advertising, on the other hand, refers to placements that promote products or services unrelated to the environment where they are displayed. In this strategy, the goal is not necessarily contextual relevance but capturing audience attention by leveraging insights and data to match consumer preferences across different environments.

In retail media, non-endemic ads target customers on platforms where the advertiser’s product isn’t sold but where there is an overlap in audience demographics or behavior. 

Example of Non-Endemic Advertising:

• Car Ads in Supermarkets: An ad for a car company displayed on digital screens in a supermarket. While cars aren’t sold in the supermarket, the audience may include potential buyers, and the high-traffic environment creates exposure. 
• Real Estate in Coffee Shops: An ad promoting local real estate listings on screens in a café may seem unrelated to the environment, but it targets a demographic likely to be interested in property purchases. 

This approach allows brands to expand their visibility and reach consumers in unexpected places, potentially piquing interest in a product outside of its usual context. 

The Role of Endemic and Non-Endemic Advertising in Retail Media

Both endemic and non-endemic advertising strategies offer unique advantages when integrated into retail media networks. 

1. Endemic Advertising Benefits:
   • Contextual Relevance: Since the ads are closely tied to the environment, they feel more natural and may resonate more with the audience. 
   • Seamless Shopping Experience: These ads often lead directly to purchases, as they promote products that shoppers are already seeking. 
   • Enhanced Engagement: By placing ads within relevant environments, brands can achieve higher engagement rates, as the product is already top-of-mind. 
2. Non-Endemic Advertising Benefits:
   • Increased Reach: Non-endemic advertising allows brands to access new audiences in diverse locations. 
   • Cross-Selling Opportunities: This approach helps brands introduce products to consumers who might not encounter them in their regular shopping habits. 
   • Diversified Revenue Streams: For retailers, non-endemic ads provide additional ad space opportunities, maximizing revenue beyond in-store sales.

Endemic and Non-Endemic Advertising in DOOH

When applied to digital out-of-home (DOOH) advertising, the difference between endemic and non-endemic becomes even more pronounced. DOOH campaigns rely heavily on location-based data and consumer insights to deliver relevant ads, but the type of product being advertised determines whether it is endemic or non-endemic. 

Example in DOOH:

• Endemic DOOH: A gym displaying ads for workout supplements on digital screens near the entrance. 
• Non-Endemic DOOH: The same gym displaying an ad for a local restaurant, enticing gym-goers to grab a meal after their workout.

The flexibility of DOOH allows advertisers to strategically choose placements and ad display time, whether they want to tap into an endemic context to enhance relevance or a non-endemic setting to capture attention in high-traffic locations. 

How Retail Media Networks Benefit from Both Strategies

Retail media networks can benefit from a balanced mix of endemic and non-endemic advertising. While endemic ads offer immediate relevance and fit seamlessly into the consumer’s journey, non-endemic ads provide opportunities for discovery, allowing retailers to diversify their advertising partners and revenue streams. 

For example, a retail media network might offer:

• Endemic placements for brands sold within their platform, ensuring those ads get priority visibility, such as placing shoe ads in a fashion retailer’s app. 
• Non-endemic placements for brands outside their inventory, allowing them to promote related but unaffiliated products, such as car insurance ads targeting the same customer base.

Choosing the Right Approach for Your Brand

The decision between using endemic or non-endemic advertising depends on several factors: 

• Brand Goals: Are you trying to reinforce relevance with your existing audience or introduce your brand to new customers? 
• Audience Behavior: Is your target audience likely to respond better to contextually relevant ads, or do they have interests that extend beyond the immediate environment? 
• Budget and Reach: Endemic advertising may come with higher conversion rates, but non-endemic campaigns can offer greater exposure and brand awareness. 

In order to execute effective retail media strategies, both endemic and non-endemic advertising play vital roles. Endemic ads provide consumers with a seamless, relevant experience, driving purchases in context, while non-endemic ads open up new opportunities for audience expansion and revenue generation. By including DOOH in their advertising strategy, brands can implement both approaches to optimize their media buying and ensure they’re reaching the right consumers in the right moments. 

For brands looking to integrate these strategies, FRAMEN’s digital out-of-home solutions can provide the tools necessary to tailor your ad placements for maximum impact – where your goal is to blend in or stand out.