In this op-ed, Matt Farrington, president, trading & investment, APAC at Dentsu dives in to the state of retail media, and the challenges and opportunities for the year ahead…

As we were expecting, 2024 delivered another year of rapid growth in the global retail media market. We saw new entrants from banks (Commonwealth Bank in Australia, JP Morgan in the US), airlines (Air Asia’s MOVE, United Airlines’ Kinective Media) as well as continued investment from the earlier movers such as bricks and mortar retailers, super apps, and digital marketplaces. Asia Pacific (APAC) is further down the maturity curve and the next centre of growth for retail media networks (RMNs). Multi-category marketplaces like Shopee and Lazada, e-commerce platforms like Carousell and quick commerce platforms like Grab have embedded RMNs and are thriving. 

However there is room for much more investment by large and medium-sized e-tailers within the telecommunications, travel and real estate sectors. In Dentsu’s most recent global ad spend forecasts, we pegged year-on-year growth for the channel 2024 at 32.0%, in stark contrast to overall global ad spend growth of 5%.

An evolving dynamic

In some parts of the ecosystem, we’re now entering a maturity period for retail media where the most established and well-developed players will need to decide how they participate in the industry at large. Despite many networks having recruited seasoned professionals from the industry, commercial trading and demand management has not always been in the wheelhouse of these companies. With my agency investment hat on, I am fascinated to see how the RMN-agency dynamic continues to evolve.

At the top end, we see major multi-market RMNs – those with scaled inventory volume and well-organised data offerings – continue to grow their commercial savvy. What I am interested in here is, as they enter more trading discussions with major agencies to secure forward revenue from major advertisers, will they adopt the commercial mindset and trading principles that the industry is driven on? As agencies continue to build around proprietary solutions and outcomes-oriented investment models, can RMNs participate and shape their offerings accordingly? This will be intriguing to watch (and I welcome the conversation!)

On the other end you have a long tail of more niche providers, who will need to embrace programmatic pipes and potentially even decouple their data in order to capture buying volume. It is simply not reasonable for advertisers and buyers to spend time getting to know 250+ (and growing) RMNs, each with limited scale and supply. Aggregation is key here, and I would say that if fragmentation is not solved-for then it’s an existential threat for some parts of the ecosystem. RMNs on this scale should lean into the exchange ecosystem and build data partnerships with buying platforms, so they can best monetise their owned assets and focus on the tech, rather than becoming a sales machine.

2025 could potentially be a make or break year for retail media. How the channel transforms from high growth to sustained profitability and the impact this has on their business and revenue structures, could well further reshape an already dynamic ecosystem.

Read more about this topic in our Retail Media Hub.