Amazon Australia's advertising business is growing significantly faster than its marketplace revenue. The company does not break out Australian ad revenue separately, but global advertising revenue hit US$14.3 billion in Q1 2026, up 19% year on year. Australian CPG and retail brands are reporting increasing pressure to allocate budget to Amazon's sponsored product and display advertising to maintain visibility on the platform.
Retail media networks, where retailers sell advertising on their owned platforms, are the fastest growing category in Australian digital advertising. IAB Australia estimates the category grew 35% in 2025 and is on track for similar growth in 2026. Amazon, Woolworths (via Cartology), Coles (via Coles 360) and Chemist Warehouse are the primary players.
The value proposition for advertisers is closed-loop measurement. Unlike Google or Meta, retail media platforms can connect ad exposure directly to purchase. A sponsored product ad on Amazon leads to a purchase on Amazon, and the attribution is deterministic rather than modelled. For CPG brands spending significant budgets on trade marketing, this level of measurement clarity is genuinely new.
Growth in Australian retail media advertising in 2025, the fastest growing digital ad category (IAB Australia)
The challenge is that retail media budgets are not purely incremental. For most brands, the money is coming from a combination of trade marketing budgets (previously spent on in-store promotions and co-op programs), digital advertising budgets (shifted from Google Shopping and Meta), and brand budgets (reallocated from upper-funnel campaigns). The net effect is budget fragmentation across an increasing number of platforms, each with its own campaign management interface, creative specifications and reporting format.
Amazon's particular advantage in Australia is its marketplace data. The platform knows what consumers browse, add to cart, purchase and repurchase. That first-party data set is more granular than anything Google or Meta can offer for product purchase behaviour. For brands selling on Amazon, the advertising platform is less an option and more an operating cost.
The implications extend beyond Amazon sellers. Amazon's demand-side platform (DSP) allows brands to use Amazon's audience data for programmatic advertising across the open web. A brand can target Amazon shoppers who browsed a competitor's product and serve them display ads on news sites and content publishers. This capability puts Amazon in direct competition with Google and Meta for upper-funnel brand advertising.
Why it matters
Retail media is reshaping how Australian brands allocate marketing budgets. The channel offers measurement advantages that search and social cannot match, but it also creates a pay-to-play dynamic where organic visibility on retail platforms declines as advertising inventory expands. Brands that do not invest in retail media risk losing shelf visibility on the fastest growing e-commerce platform in Australia.
What to do about it
If you sell on Amazon Australia, treat Sponsored Products as a cost of doing business, not a discretionary ad spend. Start with auto-targeting campaigns to build keyword data, then migrate to manual campaigns with product-level ROAS targets. If you sell through Woolworths or Coles, engage with Cartology and Coles 360 sales teams now. Review your total trade marketing budget and identify where retail media should sit alongside traditional trade spend. The brands that integrate retail media into their channel strategy early will build data advantages that compound.
