Australia’s retail media investment is growing but buyers are demanding “sharper standards” as new IAB research released today reveals inconsistent metrics remain the biggest challenge for 73 per cent of active buyers.
The IAB Australia Retail and Commerce Media State of the Nation 2026 report, which is based on data collected from experienced retail and commerce media practitioners, noted that retail media is now competing more directly for established advertising budgets. Nearly half of retail and commerce media investment is now fully reallocated from other channels, with trade retail budgets and traditional advertising the largest sources of reallocated spend.
According to IAB, as a result, buyers are becoming more precise about where they want the bar raised.
Measurement remains the defining barrier with inconsistent metrics and definitions across networks cited as the top measurement challenges by 73 per cent of active buyers, while 59 per cent encountered challenges measuring ROAS or ROI. Advertisers are also focused on effectiveness when evaluating partners, with ad effectiveness measurement and performance the joint top criteria, both selected by 48 per cent of respondents.
The report found advertisers are increasing spend across the main retail media channels, including ads on retailers’ own websites and apps, retailer-powered ads across other digital environments, and advertising inside physical stores.
Over the past year, 63 per cent of active buyers increased spend on retailers’ own websites and apps, while 65 per cent increased spend on retailer-powered advertising outside the retailer’s owned channels. The report also found strong support for certification as a trust signal, with 80 per cent of surveyed brands and agencies saying a retailer’s IAB certification status would increase their willingness to work with them as a retail media partner.
“The findings show retail and commerce media are now firmly part of media planning and competing for real budgets,” Gai Le Roy, CEO of IAB Australia, said.
“At the same time, buyers are asking harder questions of their partners and retailers are evolving their measurement offerings in response. That is a sign of market maturity. The next phase will be about making it easier for advertisers to invest with confidence across a more complex ecosystem. That requires standardised measurement, comparable metrics, stronger data infrastructure and better alignment between trade, marketing and media teams.”
Advertiser experience with retail media partners has improved, with 66 per cent of surveyed brands and agencies rating their experience as good, up from 44 per cent last year. However, the ecosystem is also becoming more complex, with 86% now working with three or more retail or commerce media partners and a third working with more than five.
Retailers and commerce media networks are also candid about where they sit in this reset with just 22 per cent describing their retail media offering as advanced and 47 per cent describing it as still developing. Retailers and commerce media networks indicated they are investing in the next stage of capability over the next 12 months with 84 per cent planning to enhance measurement, 84 per cent to expand formats and channels, and 84 per cent to expand their first-party data offering.
More than half also plan to explore and adopt AI technologies, with the greatest opportunities seen in data analysis and insights, audience targeting, and measurement and reporting.
Lachlan Brahe, chair of the IAB Australia Retail Media Council, said “Rapid growth balanced with increasing sophistication are encouraging signs for the industry.”
“Our latest findings show that advertisers are expecting more robust measurement and transparency, and retailers are investing in advanced solutions to address these and other areas. The ongoing work of the IAB’s Commerce and Retail Media Council is aimed at bridging these organisational gaps and unlocking even greater trust and value across the retail media sector.”
Incremental sales measurement and ROAS are the most sought-after metrics from retail media partners, cited by 83 per cent and 76 per cent of active buyers respectively.
However, retailer provision remains uneven, with 64 per cent of retailers and commerce media networks offering incremental or sales lift measurement and 60 per cent offering ROAS.
