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The Value of Relationships Between Retailers and Non-Endemic Advertisers

Customers are the most valuable asset to any retailer’s business, and access to these people and their shopper data is increasingly in demand by brands. As more retailers have started to realize the opportunity those assets present, we’ve seen a rise in retail media networks (RMNs) that allow the retailer’s vendors and suppliers to reach their customers in a commerce moment. There is, however, another player in this relationship, and that’s a brand that doesn’t sell directly through the retailer, but offers complementary products or services. These are known as non-endemic (NE) advertisers. In order to elevate their respective marketing programs, RMN and NE’s alike should consider building a relationship, as both parties stand to realize significant gains.

Two Reasons Retail Media Networks Should Bring on Non-Endemic Advertisers

  1. An NE partnership creates a new, significant revenue stream. While non-endemic advertisers bring both monetary and partnership value to a retailer’s RMN, the primary value is the NE’s media spend. NE’s often have larger media spend compared to endemic advertisers who, in many cases, are spending shopper media dollars. Merkle survey results indicate that the opportunity is great, with seventy-six percent of CPG brands planning to contribute to non-endemic spending.
  2. NE brands create better customer experiences with complementary offerings. Non-endemic relationships and advertising can provide better experiences for the retailer’s customer. For example, a specialty retailer may carry a limited set of categories or brands, but there could be many complementary brands that shoppers are looking for when they visit the retailer’s site. Imagine a beauty retailer expanding its value to its existing customers by partnering with fashion brands to offer a larger set of products, or a home improvement store partnering with real estate or design brands to fill in more home-focused needs of a customer. The advertiser’s offerings can expand a retailer’s existing e-commerce experience and potentially send new shoppers to the retailer, increasing site traffic and first-party data.

Two Reasons Non-Endemic Advertisers Should Partner with Retail Media Networks

  1. RMNs offer access to robust first-party loyalty and transaction data. This is especially valuable in a world without third-party cookies, where third-party identity graphs are becoming more restricted and less valuable. The retailer has deep transactional data across dozens of product categories over many years. This means a brand could work with the RMN to craft audience segments built off of years of a family’s shopping habits, from food and cleaning supplies purchases to their clothing and entertainment preferences.
  2. RMNs create a pool of relevant customers in a commerce moment. By nature, customers that are on a retailer’s site are engaged in a commerce moment, showing intent to make a purchase. NE’s partnering with RMNs can reach those customers with relevant products that are not otherwise offered on the retailer’s site in an environment that’s less competitive than other marketing channels, like search.

Considerations for Forging a Successful Partnership

There are several important factors that an RMN and NE advertiser must consider in order to forge an effective partnership and fully realize the benefits outlined above.

  • Finding the right fit. The non-endemic offering must make natural sense to the customer, while aligning with the retailer’s brand image and avoiding any possibility of cannibalization.
  • Determining the depth of relationship. Engagements can range from strictly programmatic advertising to complete business model innovation, so both the RMN and NE advertiser need to align on their goals for the relationship to create the right partnership.
  • Planning executional elements. As with any marketing program, nailing all areas of execution, from audience targeting to measurement, is a must in order for the relationship to be successful.

With careful planning and consideration, retail media networks and non-endemic advertisers can create strong, lasting, and mutually beneficial relationships. Download our playbook to learn more about how to plan and execute on critical elements, including the right brand fit, the proper level of customer engagement, optimal use of audience data, the right media solutions, effective creative and branding, a reliable way to measure performance, and more.

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