Though on-site search and display remain retail media’s bread and butter, off-site advertising—placing ads in channels outside of a retail media network’s (RMN’s) own properties—will lead the next evolution due to its ability to expand advertisers’ reach and achieve upper-funnel goals like increasing brand awareness.

Nearly half (46%) of advertisers say they currently activate off-site retail media when working with a retailer, according to a December 2023 survey designed by TripleLift and executed

in partnership with EMARKETER. Of that, over two-thirds (68%) agree that off-site is a necessary part of their retail media strategy.

Driven by a desire for full-funnel campaigns, advertisers are also exploring upper-funnel off-site channels. Top off-site formats include display (used by 36% of advertisers), online video (33%), and connected TV (CTV) (26%), the survey found. Social media advertising and paid search were also cited as popular off-site formats.

• US retail media ad spend on CTV will skyrocket in 2024, rising 335.5% YoY to reach $3.64 billion, per our forecast. Though it will represent just 6.1% of total retail media ad spend, the money spent on retail media CTV advertising will more than double by 2027, reaching $8.64 billion.
• In order to provide advertisers with more ad opportunities, some RMNs are partnering with social platforms to target their users off-site. For example, Amazon teamed up with Meta and Snapchat on in-app shopping ads in 2023.

Off-site investment is growing

Over half of advertisers who currently activate off-site advertising plan to increase their spend over the next 12 months, the survey found. About a third (34%) will shift these funds from existing budgets, but 21% will find new incremental budget to increase their off-site efforts.

This influx of investment will help US retail media off-site ad spend grow by 64.1% in 2024 to reach $11.04 billion, according to our forecast. That number will more than double by 2027, totaling $24.02 billion.

As off-site grows, so will the number of programmatic activations.

• Among advertisers who currently activate retail media programmatic campaigns, 90% plan to continue doing so in the next 12 months, according to the survey. Of those who don’t currently activate, 33% plan to begin in the next 12 months.
• US programmatic digital display ad spend will grow 15.9% in 2024 to reach $157.35 billion, according to our forecast. Programmatic digital video ad spend will also increase, rising 20.9% to reach $93.95 billion.

Off-site offers a new landscape and performance opportunities for both advertisers and retailers

As retail media expands into off-site, advertisers and retailers are experimenting while also navigating off-site’s ins and outs.

Performance is the most important factor for advertisers when considering activating off-site, according to the survey. But many advertisers are still deciding whether it should be used for upper-funnel or lower-funnel goals.

• While 58% of brands and agencies say off-site is better for upper-funnel goals, 34% use off-site to satisfy lower-funnel goals.
• Conversion rate is the top KPI advertisers are optimizing toward with off-site, cited by 56% of current off-site activators. Other top KPIs include return on ad spend (54%), clickthrough rate (48%), cost per click (46%), and online sales (45%).

This illustrates a contradiction between what advertisers say they use off-site for and how they’re actually executing those campaigns, possibly due to the complexities of this fast-growing ad channel.

• “The conflicting signals on what off-site spending helps marketers achieve are a testament to off-site’s potential, rather than confusion about it,” said Willens.
• To ensure a full-funnel effect, advertisers can employ both off-site and on-site advertising, optimizing each against the goals they wish to achieve.

Echoing advertisers’ sentiments, 71% of retailers who currently offer off-site advertising agree that it is an essential part of their retail media strategy, per the survey.

For retailers, the value of off-site advertising ranges from boosting revenues to generating awareness.

• Two-thirds (67%) of retailers cite increased revenues as the top factor when deciding to offer off-site advertising to their clients. The second factor (60%) was satisfying client requests, followed by scaling target audiences (57%).
• Off-site can also be a great way for retailers to generate awareness without digging into their own budgets, providing an opportunity for both brands and retailers to reach a wider audience.

Want to learn more about how advertisers, retailers, and third-parties can collaborate to improve the off-site retail media experience? Download our free report, “How off-site advertising can lead retail media’s next big growth phase.”

This was originally featured in the Retail Media Weekly newsletter. For more marketing insights, statistics, and trends, subscribe here.