Jack Byrne.
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Jack Byrne, CEO APAC, Zitcha.
If the last couple of years have been characterised by Australian retailers rushing to stand up retail media networks, the next one will be when they learn what it really takes to run one. For all the hype and the ‘rivers of gold’ revenue headlines, the reality is retail media is not a plug-and-play revenue stream. It is a business transformation and transformation takes planning, structure and, above all, change management.
Retail media’s reality check
According to IAB Australia’s Retail Media: State of the Nation 2025 report, seven in ten advertisers and agencies increased their retail media investment over the past year, and 77 percent are now working with three or more networks. The category is maturing fast, but for some retailers, building a functioning retail media business has proven far more complex than expected.
Many retailers underestimated the internal change required to effectively build and scale a retail media network, jumping in quickly, announcing big ambitions, and then realising the operating model was not set up to deliver. Others, such as Wesfarmers, took a slower, more deliberate approach, spending time to strategically plan their entry to ensure it is structured for long-term growth.
The industry is now going through something of a course correction. In the US, where retail media maturity is several years ahead, leadership shifts are already underway. Retailers have woken up to understanding RMNs are not just about advertising but more about running a high-margin retail media business that also drives higher margin on the traditional retail business. Finance heads are increasingly taking the retail media reins because retail media now sits closer to the bottom line than the marketing budget, which is where it should be.
Expect to see more of that locally. Some major Australian retailers are already looking offshore for retail leaders with deeper experience from the US. Importing international expertise will only accelerate RMN growth and prevent the start-up missteps.
Margin becomes the measure
Retail media has grown into a $2 billion-plus industry in Australia and could approach $2.5 billion to $2.8 billion in 2026 based on multiple forecasts. But top-line revenue only tells part of the story. The true health of a retail media network lies in how much of that revenue reaches the bottom line and next year will be defined by a sharper focus on what really matters: margin.
There are two margins, not one. Media margin is the profit retailers make from selling ad space. On owned assets like websites or sponsored products, margins can reach 90 percent. On in-store screens, after capital and operational costs, that falls closer to 50 percent. Offsite, where networks buy media through third parties, it can drop to 20–30 percent. Blended across channels the average media margin sits around 50-60 percent before overheads.
Retail margin is the incremental sales and profit generated by that advertising. This is the one most networks do not measure well yet. It proves retail media is more than just an ad business, it is a profit engine that can lift the entire retail P&L.
In the US, the penny has dropped. Retail media heads at major retailers have lost their jobs because CFOs now care less about ad revenue headlines and more about what is left after costs. Miss your margin target, and the marketing or revenue story does not matter.
Australia is not quite there yet, but it is coming. Accountability for retailers will shift from media performance metrics like ROAS to financial metrics like contribution margin. Retailers that build systems to measure, report and optimise for margin will be the ones still standing in two years.
Time to grow up
Retailers must evolve from chasing sales to building sustainable operating models. That means aligning teams around joint business planning, connecting product availability, price and promotion with media delivery, and using technology to close the loop between planning, activation and measurement.
We’re seeing more retailers ask not just how do we sell more media, but how do we make retail media more profitable. They want tools that connect SKU-level performance to campaign-level profitability and give real-time visibility into where margin is leaking and how to fix it.
Retail media is not just a new revenue stream, it’s a new operating discipline. The retailers who treat it that way will build enduring growth and the ones that don’t will never fully maximise the full retail media opportunity.
The good news is that the industry’s growing pains are a sign of progress. While retail media and RMNs in Australia is still young, the learning curve is steepening fast. 2026 will be the year the industry grows up. Retailers will get better at structuring teams, integrating data and understanding that scale means little without efficiency. Agencies will demand consistency and transparency and the conversation for retailers should shift from how much can we make, to how much do we keep.
Margin will be the new RMN power metric. Get it right, and retail media becomes an indispensable profit lever. Get it wrong, and all those rivers of gold will dry up faster than anyone expected.
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