Costco's Retail Media Network Adds AI Onsite Ads
Costco Wholesale is ready to accelerate the buildout of Costco Velocity, its newly branded retail media network.
Mark Williamson, AVP of retail media at Costco, unveiled the next phase of the Costco Velocity platform: A partnership with ad tech firm Moloco to bring AI-powered onsite advertising to Costco's website, starting with a new format called Reserved Display.
"We designed the Costco Velocity platform to answer that question," Williamson wrote in the company's LinkedIn newsletter article, "combining the strengths of our membership model with modern ad tech to create unique moments of inspiration for every visitor."
Reserved Display is the first new ad format built natively on the Costco Velocity stack. Launching across high-traffic pages, including the homepage and search results, the placements are what Williamson calls "personalized digital endcaps," designed to blitz through the product discovery phase by presenting shoppers with "highly visible, highly relevant" advertisements.
Costco tapped Moloco for the job because of its AI-native architecture, specifically its use of deep neural networks and operational machine learning trained on actual purchase behavior. The partnership aims to create ad decisioning that draws on the full picture of a member's shopping patterns rather than a single snapshot.
Williamson outlined four principles shaping how the engine will work in practice:
- The system will be omnichannel-centric, using real-time signals to predict member relevance across a shopper's journey instead of a single visit.
- Optimization will target actual sales instead of impressions or click-through rates.
- The measurement framework will focus on real incremental growth, distinguishing new demand from credit shifting between channels.
- Moloco’s AI will integrate directly with Costco’s identity resolution and audience-building infrastructure so advertisers can activate their custom Costco audiences within onsite campaigns without additional setup steps.
Beta partners will get access in the second quarter of 2026, with broader availability to follow. Through Q2 and Q3, Costco plans to expand available ad slots and formats while connecting Reserved Display into SSP and DSP platforms for programmatic buying.
In the meantime, Williamson encouraged advertisers to run Reserved Display alongside their existing Criteo-enabled sponsored product ad campaigns to maximize coverage across the site.
This article was originally published on P2PI sibling brand Progressive Grocer.
