The AdNews end of year Perspectives, looking back at 2024 and forward to next year.
Will Chapman, Managing Partner, Avenue C
For many of us we’ll be happy to see the end of 2024. Consumer confidence remained at record lows, Australian inflation has been notoriously stubborn, and most Aussie’s have made sacrifices simply to get by. All of this was clouded by global turbulence beyond our small island’s control. This smashed global markets, and the Australian media market was not immune. We saw client expenditure retract for the first time in years, we experienced mass consolidation that became global marketing and media teams which impacted us locally and you likely know someone who was impacted/devastated by redundancies.
Fortunately, the financial markets seem to think we’re through the worst of it; we can expect improvements from here, but slowly. Consumer sentiment has bounced back, the financial markets are expecting interest rate cuts in February (albeit some are less optimistic and talking May) and jobs growth is steady, being driven by full-time employment and surging immigration. This means that consumers ‘disposable incomes are forecasted to improve into 2025 and consumers are claiming to be more willing to buy major household items in 2025.
In 2025, AI adoption and its acceleration is a given and no doubt you’ll read a lot about it in this perspective’s series, so I wanted to talk about the other elephants in the room; retail media and the “messy middle” which no longer needs to be messy because of the significant enrichment of 1st party data across the board.
Retail media is a sleeping giant in Australia and our market is behind the eight ball. Walmart, who has a market cap of $730bn USD, reported that of their last quarter’s revenue more than 50% came from retail media. Take a moment to appreciate the magnitude of that... A lot of retail brands have all but saturated their conventional revenue sources and are also being squeezed; enter retail media - a saviour and significant revenue opportunity should these brands get it right. In Australia we’ve had the Woolworths Group, Wesfarmers, Amazon and Chemist Warehouse leading the charge, however we expect this will continue into 2025 with more and more brands starting to join this party and re-evaluating exactly what their retail media strategies will be. The communication opportunities that arise from retail media are exceptional and exciting; it’s arguably the richest 1st party data available to advertisers, impactful placements that are genuinely at PoS, superior behavioural insights that allow us to divert shopping behaviour and non-conventional formats that aren’t available through traditional players. We’re excited to see the continued momentum of retail media in 2025.
The other elephant is the enrichment of 1st party data which is allowing us to correct some of our industry’s weaknesses of the past. The term messy middle is painfully overused. We have platforms, insights and 1st party data that allows us to deliver relevant messaging within the consideration layer – so it no longer needs to be messy! With these resources, brands and agencies have no excuse and should be spending the time to understand and map consumer journeys so brands can precisely communicate to these prospective customers – at scale. In 2024 the likes of Meta and Google continue to nail this, but we’re increasingly noticing traditional vendors lean into this space which means their audiences and premium environments are becoming more addressable and accessible than ever before. This will allow brands to master their push and pull balance, and in 2025 I envision more and more brands making their middle of funnel less and less messy because of their 1st party data enrichment, either through D2C or their retail partners.
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