Australia's ad market is growing 7.4% in 2026 and retail media is the fastest-growing channel, on track to overtake television by 2028. Filip Ivankovic argues that chasing the new channel is sprinkles on the cake when the fundamentals are not fixed. Most businesses pouring money into retail media still cannot tell you their conversion rate or their real return, and that is the actual problem.
A new channel does not fix a broken funnel. It just gives you a more expensive way to not understand it.
I have sat in the room when the new channel gets announced. On the agency side watching someone sell it. On the client side watching someone buy it. The pitch never changes. There is a new place to put your money, everyone is moving there, and if you are not there too you are getting left behind. Right now that place is retail media. In a year, something else.
Here is my position, and you can disagree with it. Retail media overtaking television is not the story. The story is that most of the businesses stampeding into it cannot tell me their conversion rate, what a customer is worth or whether the last shiny channel they bought made them a dollar. The channel is changing. The mistake is not.
Australia's ad market is forecast to grow 7.4% in 2026, and retail media is the fastest-growing piece of it. Spend there is set to climb another 19.5% to A$2.3 billion, and to surpass total television ad revenue for the first time by 2028. That is a genuine structural shift. The cash register is now an ad platform. Coles, Woolworths and Bunnings know what you bought and they will sell that knowledge back to you as targeting.
Retail media is Australia's fastest-growing ad channel, forecast up 19.5% to A$2.3 billion in 2026 and on track to overtake total TV by 2028 (WPP Media)
None of that is the problem. The problem is what businesses do with it.
The new channel is sprinkles on the cake
We have measured this market. Across hundreds of Australian businesses and dozens of industries we score the same six things over and over, and the pattern does not move. The dimension that drags almost everyone down is not their channel mix. It is data and tracking. The plumbing. Whether they can see what their marketing is doing.
So you get businesses running five channels with no idea which one feeds them. They add retail media as a sixth, some sprinkles on the cake and it will be all good. The sprinkles do not fix the cake. If the base is dry, more decoration just hides it for a bit longer.
This is the bit that gets missed. Every channel is a chess piece. It moves in a certain way, it has constraints and it only earns its place if you know how it connects to the next move. Search is a rook. It moves in straight lines and captures demand that already exists, people already looking for you. Social is a knight. It jumps into places the others cannot reach and creates demand that was not there this morning. Retail media is a pawn one square from promotion. It is brilliant at exactly one thing, catching someone at the shelf when they are already in buying mode, and close to useless everywhere else.
Play those pieces without knowing how they move and you are not running a strategy. You are shoving wood around the board hoping something lands. If you do not know what your existing demand looks like, you cannot tell whether retail media is creating sales or just standing next to sales that were always going to happen and taking the credit. That is the trap with a bottom-of-funnel channel. It looks like a genius the moment you switch it on, because it harvests the demand your other channels already built. The dashboard lights up. Revenue does not move. You have paid a toll on traffic you already owned.
You cannot grade a channel you cannot see
There is a test I use and it is brutally simple. Turn the channel off for a month. If revenue does not move, why are you paying for it? If you cannot answer that, you are not running a channel. You are running a hope.
Most cannot answer it. Not because they are lazy, but because they never built the tracking that would let them. A lot of marketers are not great with numbers and it causes real anxiety. So instead of fixing the plumbing, which is hard and unglamorous, they buy the new channel, which is easy and exciting.
Closed-loop attribution is the phrase the platforms use and rarely deliver. The loop is meant to run all the way round. A dollar goes out, an ad lands, a sale comes back and you can trace the sale to the dollar. Retail media breaks that loop in a way most buyers never clock. The retailer owns the last step. Coles sees the basket. You do not. You get a number handed back to you by the same company that sold you the ad, marking its own homework, on its own attribution window, counting a sale as theirs if the shopper so much as glanced at your product tile in the last fortnight. That is not a closed loop. That is a company grading its own work and invoicing you for the answer.
Your website is a shopfront too. Walk a thousand people into a shop and you can watch them, the footage, the till, your own eyes and know roughly how many left with a bag. Online, none of that exists unless you capture it. If you are not capturing it, you lose it.
Do you know how much money you make? Do you know how much money you spend? Everything else works back from there.
So before you put a cent into retail media, answer two questions. How much do you make. How much do you spend. If those are fuzzy, retail media is not your next move. Getting the numbers on the board is.
The maths nobody runs before they buy
Here is roughly where the average Australian small business sits. Marketing eats around 7 to 10% of revenue, and search swallows 30 to 40% of that. Most of the budget is committed before the new thing shows up. Retail media walks in asking for a slice.
The question is not whether retail media works. It works for plenty of businesses. The question is whether it works for yours, against your margin, at the rate you would have to spend to make it count. That is a cost tolerance decision, not a fashion decision. If you cannot run that maths, you are guessing. Lucky is not a strategy. Lucky runs out.
What I would do about it
If you are tempted, and you should be at least curious, work in this order. Fix the plumbing before you buy the channel. Get your analytics telling the truth about volume, then engagement, then conversion, sliced by channel and device. Fixing your own website often lifts revenue more than any new channel would.
Then know your two numbers cold. Revenue in, cost out. Know what a customer is worth and what you can afford to pay to win one. When you test retail media, do not throw the whole budget at it. Lay a bit in your back pocket, run it small and measure it against your own numbers not the retailer's. Kill it if it does not move your revenue line.
The next shiny thing is already loading
Retail media will overtake the telly and the headlines will be loud about it. Then it will plateau, the price will rise as everyone crowds in and a fresh channel will get announced. The pitch will not change. There is a new place to put your money and everyone is moving there.
The businesses that win this decade will not be the ones who got to retail media first. They will be the ones who knew their numbers well enough to tell, channel by channel, what was earning its place and what was just sitting on the cake looking pretty. Get the fundamentals right and any new channel becomes a chess piece you can point. Skip them and it is a more expensive way to not know what is going on.
The channel is not the strategy. Knowing your numbers is. Build that first, then go shopping.