Fresh from the IAB Australia Leadership Summit 2024 last week, CEO Gai LeRoy shared insights into the retail media network (RMN) landscape, highlighting growth opportunities and the challenges brands and retailers face in the Australian market. While Australia may trail more mature regions like the US and Europe, local collaboration and innovation could give the market a unique edge.
Australia’s RMN market: Growth underway
Australia remains a less mature RMN market compared to its international counterparts. The US and Europe boast more players and a larger slice of advertising spend. However, LeRoy pointed to solid annual growth among established Australian retailers, averaging 15–20%. She also noted new entrants to the market and Amazon’s local expansion as significant drivers of this momentum.
“The market here is still in its infancy, but we’re seeing exciting developments,” said LeRoy. “There’s clear potential for sustainable growth.”
Catching up without the fragmentation
One of the advantages of Australia’s RMN ecosystem, LeRoy explained, is its lack of extreme fragmentation compared to Europe. This could allow for a more transparent and sustainable system.
“If the local industry continues to collaborate effectively, we could see agile and creative partnerships emerge,” she said. “That’s something we’re uniquely positioned to achieve.”
What’s driving investment in RMNs?
Retail media networks’ ability to influence consumers at the point of sale makes them an attractive option for brands. LeRoy highlighted the appeal of connecting advertising exposure directly to transactions, an enticing prospect for both marketers and CFOs. However, she cautioned against overhyping closed-loop reporting.
“Brands are investing because retail media can deliver results in a cost-effective way. That ability to link exposure to transactions is compelling — but it’s not without limitations,” she said.
First-party data: The key to the future
As global privacy regulations tighten and third-party cookies phase out, first-party data is becoming critical. LeRoy sees RMNs as a vital player in this new landscape.
“Retailers who build transparent, privacy-compliant relationships with consumers have a huge advantage,” she said. “Strong first-party data allows them to offer marketers an effective, addressable media option.”
Challenges to overcome
Despite its potential, the RMN sector in Australia isn’t without its hurdles. The IAB Australia Retail Media State of the Nation report identified three key challenges for brands:
1. Measurement and reporting remain inconsistent.
2. The supplier-retailer relationship can be complex.
3. Perceived costs of partnering with RMNs are high.
“These challenges highlight the need for ongoing industry support,” said LeRoy. “In 2025, the IAB Australia Retail Media Council will continue to develop resources to help the market grow in a healthy, sustainable way.”
Australia’s RMN market is still finding its feet, but with collaboration and innovation, it has the potential to leapfrog some of the challenges seen in other regions.
“We’re at an exciting stage,” LeRoy said. “The foundations we’re building now will set the tone for years to come.”