For brands looking to place a bet on where best to place ad spend in 2025, it may not be a bad idea to place a chip on retail media.
Figures from Statista show that monthly online retail revenue in Australia from December 2019 to December 2024 has steadily increased, most recently reaching a new peak of just over $AU4.4 billion AUD.
Online retail sales sites attract audiences. Amazon Australia's the 2024 Black Friday sale was its biggest, with a record number of items sold, and the platform’s Prime Day 2024 was also Australia’s longest yet, running for six full days and delivering Amazon’s biggest Prime Day shopping event to-date globally.
It isn’t just traditional ecommerce that’s seeing good returns either - partnership management platform impact.com, which accounts for more than 50% of Australia’s total affiliate revenue, processed over $1.5 billion in ecommerce sales in 2024, an increase of 25% year on year.
Not all are feeling so positive to begin the year, though, with a number of media agencies and adtechs AdNews spoke to focusing more on the resilience of the sector in the face of broader economic headwinds as opposed to seeing any strong avenues for growth for the industry.
Vudoo’s MD of APAC, Drew Perry, said investment remains resilient but increasingly strategic, as while the post-pandemic spending surge has normalised, brands are continuing to make significant investments in technology and innovation to enhance online experiences.
Trends to watch in 2025
IAB Australia’s Retail Media State of the Nation 2024 Report, released in August 2024, showed that retail media investors spent 37% of their media and marketing budget in retail media over the last 18 months, up from 26% in 2023.
The report identified the most important driver of investment for agencies and marketers as the ability to reach shoppers at the point of purchase, followed by the opportunity to leverage the benefits of retailer first-party data.
Most retail media spend in Australia (60%) is being diverted from other advertising budgets, including traditional media channels and social media.
40% of advertisers and agencies have secured new budget or non-media budgets for retail media (up from 31% in 2023), with FMCG, Health & Beauty and Retail being the top three categories of advertisers or agency clients executing retail media campaigns.
Vudoo’s Perry said he sees four key trends emerge, the first of which is the optimisation of RMNs.
“Retailers have either built or are in the process of building their own ad networks, but there’s still much to be done,” he said.
“Early adopters are now reaching capacity, prompting a pivot toward diversifying ad inventory—extending into offsite opportunities and leveraging first-party data remain key priorities. Meanwhile, the line between online and offline retail continues to blur as consumers dictate how and when they want to purchase online.”
Perry said that in the realm of commerce-enabled creative and social commerce, social platforms have already paved the way - TikTok, for instance, has brought the checkout experience directly to the customer, setting a new benchmark in seamless commerce.
“Building on this momentum, a wave of new tech is now enabling brands to embed purchasing capabilities directly within their creative (content and ads) across the open web,” he told AdNews.
“This evolution is breaking the mould: it's no longer just about shopping on social media. Innovative retailers and agile brands are leveraging these advancements to create a dynamic, real-time shopping experience that transcends platform boundaries and truly connects inspiration with instant transactions.
“Born out of the rapid shifts during the COVID era, today’s consumers are more informed than ever, expecting personalisation at every touchpoint. Dynamic Creative Optimisation (DCO) and tailored shopping experiences are no longer differentiators—they’re baseline expectations. Shoppers demand the ability to buy on their terms—eschewing rigid store hours and traditional promotional cycles in favour of pull-driven, on-demand commerce.
“Transparency around sourcing, shipping, and sustainability is also now a critical factor in purchasing decisions (as it should be). Consumers see through greenwashing, and brands must back up their claims with real action. The informed, conscious shopper is here to stay.”
The rocket ship of retail media
More than two-thirds of companies intend to increase their owned media leverage in the next 12 months, according to Sonder's 2025 Owned Media Global Market Report.
The report by Sonder, which values owned media assets, revealed that while less than a third of respondents use audience targeting, ad-serving, campaign optimisation and monetisation software platforms, over half of the respondents leverage their first party data with partner brands through customer targeting.
New sector entrants that are expected to make an impact in the market in 2025 include finance, travel, telco and convenience.
GroupM estimated retail media would grow 26.5% in 2024, hitting $US1 billion in revenue for the first time. By 2029, the analysts forecast revenue will reach $US2.7 billion for the channel.
Similarly, dentsu anticipated significant growth across key digital segments, with retail media leading the way at +21.9% as advertisers capitalise on the high value of retailer consumer data and increasingly invest in offsite advertising, including connected TV.
Vudoo’s Perry agreed that commerce is no longer just a sales channel; it’s a fully integrated advertising and customer engagement strategy.
“Brands are tapping into ecommerce-enabled formats, retail media, and direct-to-consumer experiences to drive both awareness and conversion,” he said.
“The conversation is shifting from a dichotomy between brand and performance media towards finding innovative ways to engage consumers with creative content that also facilitates seamless interactions and transactions.
“With the advent of smarter creative strategies, we’re now able to unlock deeper insights by capturing intent data and commerce signals that extend beyond retailer websites, ultimately creating a more connected, responsive and measurable consumer journey.
One of a few key trends shaping the space, said Perry, is consumers becoming accustomed to shopping directly within social platforms, with Instagram, TikTok, and YouTube continuously refining their in-app checkout journeys.
“This capability has now extended to premium publishers through commerce-enabled creative, allowing users to complete transactions within a contextually relevant, premium environment while continuing to consume the content they started with,” he said.
“With this, brands can now move engagement into instant transactions across the open web.
“High-impact formats are also naturally evolving to become commerce-enabled, offering more real estate for integrated checkout features. This seamless integration makes it easier to convert audiences in real time while capturing valuable intent data from consumer interactions.”
Perry said he is also seeing demand for commerce-driven advertising rising as brands prioritise measurable performance, first-party data, and frictionless buying experiences.
“With consumer journeys becoming increasingly fragmented, the ability to directly link media spend to commerce outcomes has never been more critical,” he told AdNews.
“In essence, ecommerce is not just selling online, it’s a holistic advertising ecosystem. As we move through 2025, the interplay between creative content, seamless transactions and data-rich insights is setting the stage for a new era of measurable, impactful commerce.
“Brands that invest now will be best positioned to capitalise on evolving consumer behaviour.”