Retail media is the fastest-growing ad channel in Australia and most brands are spending into it blind. It is the one channel where closed-loop attribution lets you actually know if an impression made a sale. Most brands still refuse to look.
The retailers can show you exactly whether the impression made a sale. The scandal is that most brands are spending into it without ever asking to see.
I have sat on both sides of this table. I have been the brand handing over a purchase order to keep a buyer happy, and I have been the agency taking that money and quietly hoping nobody asked the hard question. So let me say the hard question out loud. Most of the money going into Coles 360, Cartology and Amazon Ads right now is not a capital allocation decision. It is a reflex. Everyone else is doing it, the buyer wants it, so the cheque goes out. That is not a strategy, that is a hope.
Here is the thing that makes this one genuinely maddening. Retail media is the rare channel where you do not have to guess. The retailer owns the ad and the till. They can see whether your impression turned into a sale in their own store. Closed-loop attribution, they call it. For years marketers have begged for a channel where the numbers are actually there. Now they have one, and most of them are still flying blind.
The fastest-growing channel in the market, and nobody's checking
The numbers are not small. WPP Media forecasts the Australian ad market to grow 7.4% in 2026 to A$31.1 billion, and retail media is the piece pulling the whole thing forward. Retail media is tipped to hit A$2.3 billion in 2026, growing 19.5%, the fastest mover in the market. It is forecast to overtake total TV ad revenue by 2028.
Retail media is Australia's fastest-growing ad channel in 2026, forecast to hit A$2.3 billion and overtake total TV ad revenue by 2028. Source: WPP Media midyear forecast.
That is the crossover moment. A channel that barely registered a few years ago is about to pass the medium that defined advertising for half a century. When something grows that fast, the money floods in on momentum. People spend because the channel is growing, not because it earns its place. If everyone zigs, you have to at least ask why you are zigging with them.
The retailers are grading their own homework, and the brands are letting them
Coles 360 grew its retail media income 10.3% in the first half of FY26. Cartology and Coles 360 together are closing in on A$1 billion a year in ad revenue. That money is coming out of brand marketing budgets and going straight onto the retailer's revenue line. In the US, Amazon commands 79.7% of retail media ad spend, and it is hoovering up local dollars here too.
Look at who benefits. The retailer sells you the ad, runs the ad and reports back on how the ad went. They are grading their own homework. Now, closed-loop attribution is a real strength, the retailer genuinely can see the sale. But the strength only counts for you if you go and read the receipt yourself. Most brands do not. They take the retailer's dashboard at face value, nod along and renew.
The attractors will all say they are doing a really good job. They are incentivised to do that. That is not a knock on Coles or Woolworths, it is basic commercial sense. If you were selling the ad and reporting the result, you would frame it kindly too. Your job as the brand is to be the sceptic in the room, not the buyer who signs and looks away.
It is a tax, and you are paying it without reading the bill
Let me be blunt about what most retail media spend actually is. It is a tax. You pay it to keep the buyer happy and your product on shelf. There is nothing shameful in that, shelf presence has commercial value and a good relationship with a major grocer is worth real money. But a tax you pay without reading the bill is just money bleeding out.
This is the sprinkles-on-the-cake problem. Brands treat retail media as decoration they scatter on top to look active, instead of fixing whether the spend does anything. They think, we will put some sprinkles on the cake and it will be all good. The cake underneath is untouched. Nobody has asked whether the channel makes volume, makes margin or just keeps the buyer happy.
That is the test I run on every channel. Does it make volume? Does it make margin? Or does it keep the regulators, or in this case the buyer, happy? If it does not do one of those three, I am not sure why we are doing it. Retail media can absolutely tick the first two boxes. The problem is most brands never check, so they cannot tell you which box it is ticking, if any.
Every channel is a chess piece. It moves in certain directions and not others. Retail media's move is bottom-of-funnel, close to the purchase, with the retailer's first-party sales data behind it. That is a powerful move if you use it as what it is. It is a waste if you treat it like a brand-awareness play or a box you tick because a competitor is in there.
What I would do about it
Stop treating the retailer's report as the answer. Treat it as the opening claim.
First, get the closed-loop data into your own hands and next to your own numbers. The whole point of this channel is that the sale is measurable. Pull the incrementality read, not the last-click one. Ask the binary question. If you turned this spend off, would the sales go with it, or would they have happened anyway. If you turned it off and nothing changed, well, why are we spending money there.
Second, rightsize it. If retail media is genuinely making you margin, why wouldn't you put more in. If it is a tax, name it as a tax, cap it at what shelf access is actually worth to you and stop pretending it is performance. Do not treat your grocer relationship as a land grab where more is always better. Scale when you know. Scale back when you don't.
Third, put some infrastructure in place so you are not doing this blind again next quarter. You do not need to be an accountant about it. You just have to be able to understand what is going on. Do you know how much this channel makes you? Do you know how much you spend on it? We can work back from there.
If you cannot answer those two questions, you are guessing. If you are guessing, you are getting lucky. Getting lucky is not a plan you can repeat.
The channel finally gave you the numbers. Go and look at them.
We have measured this market across a lot of Australian businesses, and the pattern is not subtle. The ones that win know their numbers channel by channel. The ones bleeding out spend because a channel is growing, not because it earns its place. Retail media is about to become the biggest test of that split there is, because it is the first channel in years where the numbers are genuinely there for the taking.
That is the part that should sting. This is not a channel where the data is murky and you are forced to guess. The retailer can hand you the answer. Most brands are refusing to open the envelope.
So if you are going to pay the retail media tax, and plenty of you should, at least read the receipt. The channel finally put the numbers on the board. Refusing to look at them is a choice, and it is the wrong one.