Retail advertising growth must be kept in perspective

Retailers leverage first-party data to grow marketing arms, but the impact remains confined to the FMCG sector.

David Kennedy · Venture Insights15 March 2024Period: FY234 min read

29%↑

Revenue growth for Woolworths' Cartology (FY23)

$1.35B↑

Combined revenue of Cartology and Rewards & Services (FY23)

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Abstract

This report analyses the rapid growth of retail advertising in Australia, specifically focusing on the media arms of Coles and Woolworths. While Coles 360 reported a 27% increase in media income and Woolworths' Cartology saw 29% growth in FY23, the analysis suggests the threat to traditional broadcast media is currently limited to the FMCG sector. The brief evaluates how retailers use loyalty data to improve ROI transparency, potentially challenging global digital incumbents like Google and Facebook.

Key Takeaways

Woolworths' Cartology is estimated to generate over $300 million in revenue following 29% growth in FY23.
Coles 360 reported a 27% increase in media income, though specific revenue totals remain undisclosed.
Retail media growth is largely driven by revaluing traditional shelf placement deals using new data analytics.

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Frequently Asked Questions

Woolworths' Cartology is estimated to generate over $300 million in annual revenue following 29% growth in FY23. When combined with Rewards & Services, the total revenue for this segment reached $1.35 billion in the same period.

The threat is currently concentrated in the FMCG sector, where suppliers account for nearly two-thirds of national digital advertising spend. Traditional broadcasters can mitigate this risk by leveraging the VOZ platform and superior measurement capabilities to maintain their share of brand-building budgets.

Advertisers are seeking better transparency, as only 36% of spend through digital DSPs effectively reaches consumers. Retailers use loyalty data to provide higher ROI visibility, leading to media income growth of 27% at Coles 360 in the last financial year.

Growth is largely driven by the data-led revaluation of traditional shelf placement and trade deals. By applying advanced analytics to loyalty data, retailers are converting standard supplier agreements into high-margin media assets, resulting in year-on-year growth rates of up to 29%.

Retail advertising growth must be kept in perspective

Abstract

Key Takeaways

Frequently Asked Questions

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