Spare a thought for marketers on the downhill run to the end of the year while trying to get their 2025 budgets locked in (or protect them).

November saw the announcement of Commonwealth Bank’s new retail media play, only a few months behind the US market which saw JPMorgan Chase jump on the retail media bandwagon back in April. And why not? Banks have enviable physical and customer footprints, so alongside hotel chains and rideshare apps, these recent developments were bound to happen, and with Mi3 reporting that retail media is outpacing the broader media market at 10x – surely every industry will look to hop on the gravy train in whatever way they can, be that with virtual or physical assets.

Meanwhile, every client and marketer I speak to is being asked to do “more with less” in 2025 – a familiar challenge but one that has taken a harder edge in the past 12 months, with the well-documented shift toward digital performance channels (80 per cent of global marketers doing so per Nielsen’s 2024 Annual Marketing Report) indicative of the pressure marketers are under to show immediacy.

Money, data, measurement

This context bodes well and goes some way to explain the major growth for retail media – the ability for brands to utilise first party data from their retailer (or fin services / hospitality / other…) partner of choice for audience targeting is one of the most appealing opportunity (alongside reaching shoppers at the point of purchase) per IAB Australia’s Retail Media State of the Nation 2024 report.

In categories such as FMCG where first party data is hard to come by, this was already hyper-appealing, and as the retail media approach expands into new territories this motivator will be attractive for brands to expand their prospecting pool in a world of shrinking cookie-based targeting, and to “do more with less” by reaching qualified audiences based on partner data. On the flipside, the IAB report labels measurement and reporting as the top barrier to retail media investment for brands, with closed retailer ecosystems leading respondents to lament the lack of independent and standardised metrics in the space.

In all of this, I can’t help but be reminded of the gold (or data) rush seen in the first half of the 2010s as advertisers funneled more and more of their marketing dollars into online platforms and programmatic, seeking both immediate sales impact (or more accurately, sales attribution) and the ability to hypertarget pre-built audience segments to illustrate that dollars were being spent efficiently and wastage eliminated.

There’s now been a reckoning on the accuracy and legitimacy of those audiences in both platforms and on the open web, and signal loss has led media owners such as Meta to advocate away from hypertargeting and towards reach buys and algorithmic determination.

Siphoning brand budgets

I vividly recall conversations with a client back in the mid-2010s in which they were experiencing internal pressures to “uncap” paid search budgets in order to drive as much attributed sales as possible – even though their media budgets had been static and that channel that had already close to doubled in its investment levels since the previous year due to last click sales attribution, increased competition and changes to the way Google was treating keyword match types (expanding what was determined an ‘exact match’). Their brand activity and traditional media were of course the casualties that needed to provide the funding – again we are back to the future with marketers reporting 60 per cent of retail media investment being funded by traditional and social media.*

With this client we were able to assist their business case via diminishing returns analysis, successfully capping the investment on brand SEM, and with a particularly useful analogy of brand search being like the “wacky inflatable tube guy” outside the car dealership – a useful navigational medium – but no matter how good its footfall counter, probably not the key sales driver.

All of this is without wading into the muddier waters of retail media when it comes to navigating trade and sales teams, and the contractual requirements of the major retailers when it comes to brands utilising retail media space in conjunction with store shelf space. IAB reports that the “boundaries between trade and media budgets” are fading, something which will continue as retail media networks build out more full-funnel capabilities.

On the other hand, incoming privacy regulation could have something to say about retailers, banks, BNPL lenders and other providers utilising anonymised customer segments. 

Lessons to apply

So what are the key lessons to learn from the battles already fought by marketers in defending their growth budgets since the introduction of “navigational” media?

1. Measurement corroboration – In 2024, marketers, agencies and technology vendors are increasingly building new measurement options to avoid overreliance on last click or in-platform reporting. Incrementality constructs, market mix models, holdout testing and agile brand/lift/audience tracking marketers should no longer rely purely on one data source to demonstrate the impact of their marketing efforts – although this was the simplest way to demonstrate ROI in the mid-2010s, it also vastly undersold the total value of marketing in driving business outcomes.
2. Quality control – As retail media increasingly moves away from bricks and mortar into offsite audience targeting, there are lessons from “black box” technologies that online players have introduced in the past. Google for example, has often had to respond to agency/client demand for better granularity in reporting and audience/placement/inventory management by introducing new reporting or opt-out features in its more closed buy types. With the proliferation of online, offsite retail media buys – the same level of examination and quality control is needed, requiring a level of collaboration, visibility or control between the seller and buyer.
3. Brand drives performance – it’s been proven time and time again that a stronger brands have better performance and lower funnel outcomes, and that brand-building activity has an impact on short term sales results. This is no different in a retail environment, where presence in the path to purchase is important but will only supplement the decision-making process, not replace it entirely. With a more fragmented media ecosystem than ever, it’s never been more important for marketers to demonstrate the growth capability of brands and thus protect activity that will ensure future growth.
4. Collaboration – just as over the past decade there has been a convergence of brand and digital marketers in order to achieve common outcomes, the age of retail media requires stronger collaboration between marketers and their colleagues in distribution. By leveraging the media and messaging expertise of the marketing team with the product and trade relationships of the distribution team to achieve the best total result.

In the longer term, the requirement to pay the “rent” on retail media is yet another reason why short term, unavoidable media investments should be continued to be designated as “operational expenditure (Opex)”, while media that can be proven to drive longer-term growth should be classified as “capital expenditure (Capex)” – this would help marketers ringfence the budget they need to drive true growth.

^{* IAB Australia’s Retail Media State of the Nation 2024}