Woolies’ $500m media cash cow at risk in privacy crackdown
Woolworths Group’s near $500 million expansion into media by selling targeted advertising to its suppliers is at risk in the government’s privacy review, which wants to let Australians opt out of targeting and personalisation.
Retail media generates an estimated $1 billion in revenue for Australian retailers, which use their shopping data to show tailored ads to specific customers – Tim Tams to people who are likely to buy Tim Tams, for example.
The nation’s largest supermarket chain launched its media business, Cartology, in 2019. It acquired outdoor advertising company Shopper Media last year, and is a growing source of revenue. The group’s full-year gross margins were lifted in part due to Cartology. Woolworths has never confirmed this divisional revenue, but it is understood to be headed towards $500 million.
“For the latest period [Cartology] has already been meaningful,” Woolworths chief executive Brad Banducci told The Australian Financial Review.
Woolworths chief executive Brad Banducci says the company’s media business is adding meaningful margin.
“But it is just as part of all the adjacencies we need to put around our retail business in order to be able to invest for our customers and get a return for our shareholders. So, you take payments, you take rewards, you take insurance, and all of these together become very meaningful, which individually [they] might not be.”
Data is shaping up to be valuable currency for retailers in the race for deeper connections with shoppers.
Mr Banducci and Rob Scott, the chief executive of Kmart owner Wesfarmers, say retailers should be able to use data from their customers, and especially those who willingly sign up for loyalty programs.
The government wants to overhaul the
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