Retail media is Australia's fastest-growing ad channel, but most of the money going in was pulled from existing budgets and scored by the retailer that pockets the sale. The brands that win are the minority who test incrementality. Everyone else is funding a retailer's margin and calling it growth.
The seller runs the auction, sets the price and counts the sales. Then it prints the scorecard and asks you to re-book.
The Take: Retail media is not the performance channel the retailers are selling you. For most brands it is a fee for visibility on the retailer's own shelf, priced and reported by the same company banking the sale. Keep spending if the placement earns it, but stop treating the retailer's numbers as proof that it did.
Why is the money pouring into retail media?
Because on paper it looks unbeatable. Retail networks count every sale that touched an ad as one the ad caused, which can lift the reported return 30 to 60% above what it truly added.
That paper win is pulling budget fast. Nearly 47% of the money going into retail media was reallocated from other advertising rather than found as new spend. Most of it came out of trade budgets, around half of the switch. That distinction matters. Money that already existed inside the business has been renamed as media, and the retailer now takes a cut of it.
Retail media is not an advertising line
Retail media is not an advertising line. It is a placement fee the retailer charges brands to be seen in its own aisles, with a reporting screen attached. The dollars move from a brand's trade budget into the retailer's media revenue, and the retailer keeps the margin whichever way the sale falls.
The scale is real and so is the cooling.
Australia's retail media market is worth roughly A$3 billion, led by Woolworths (Cartology), Coles (Coles 360) and now Bunnings (Hammer Media). Cartology and Coles 360 together approach A$1 billion in annual ad revenue, but growth has already slowed to record lows. A channel that decelerates while it is still being sold as the future is a channel that has run out of easy incremental sales and is now recycling the same trade dollars.
What does an incrementality test actually change?
Incrementality asks the one question the retailer's report leaves out: how many of those sales would have happened without the ad? A shopper who was going to buy your product anyway, then saw your sponsored placement on the way to the checkout, gets booked as a conversion the ad created. It did not create it. It stood next to it.
Test that gap and it is large. Incremental returns typically run 30 to 60% below the last-click return the networks report. The uncomfortable part is how few brands check. A 2026 study found 75% of advertisers name incrementality as their biggest measurement challenge, while only 15% feel effective at measuring it. The industry knows the number is soft and books it anyway.
How far a retail network's reported return can sit above what the campaign actually added
The brands that do the work get paid for it. Those measuring incrementality report 54% cutting wasted spend, and 49% winning more new customers. That is not a small edge. It is the difference between spending to grow and spending to keep the retailer's revenue chart climbing. It also explains why 73% of active buyers say they are still stuck on proof and measurement. The stall is the point. As long as proof stays hard, the reported number stays flattering.
What I would do about it
Treat retail media like any other paid channel that wants your money, which means make it prove itself on your terms.
If a channel only looks profitable through the seller's own reporting, you have not found a channel. You have found a fee.
How we read this market
Here is the pattern worth sitting with. The retailers building these networks are worth billions in media revenue precisely because they are disciplined about their own data and measurement. We have scored marketing across the Australian market using a published methodology, and the shape is consistent: the businesses running the auctions tend to score high on measurement, while most of the brands buying the placements score low on it. The party with the sharper data is selling to the party without it. That is the whole trade in one line.
None of this is a case against retail media. It can earn its place, and for the right product at the right shelf it does. My read is simply that it has to earn that place on a scorecard you control, not the one the retailer hands you with the invoice. If you want help building that independent view of your own spend, that is the work we do at New Rebellion.
Frequently asked questions
Is retail media a waste of money?
No, but it is often mispriced. The placements can drive real incremental sales for the right product. The waste comes from paying against the retailer's reported return, which counts shoppers who would have bought anyway. Test the gap before you decide.
What is incrementality in retail media?
It is the share of sales an ad genuinely caused, on top of what you would have sold without it. Retail networks usually report last-click sales, which bundle in existing demand. Incremental return typically runs 30 to 60% below that reported figure.
Why is retail media growth slowing in Australia?
Because the easy trade-budget switch is largely done. Nearly half the money going into the channel was moved from other budgets rather than newly won, and the biggest networks are now posting their slowest growth on record as that pool dries up.
How do I measure retail media properly?
Run a regional or product-level holdout, read results against your own sales and margin rather than the network's dashboard and price each placement on its incremental return. If a channel only looks profitable through the seller's reporting, treat that as a warning.