Retail media may be booming, but two new reports from IAB Australia suggest that the sector is entering a critical phase, one that demands consistency, clearer metrics and a more nuanced understanding of how shoppers behave across generations and platforms.
The IAB Australia Retail Media State of the Nation 2025 Report, released today, found seven in ten advertisers and agencies have increased their retail media investment in the past year, with 77 per cent now working across three or more retail media networks (up 58 per cent from last year).
Budgets are being reallocated from trade marketing, traditional media, social and digital display, pointing to retail media’s new role as a central channel in holistic media planning.
Yet with scale has come frustration. Advertisers are calling for better access to data and more consistent, standardised metrics across networks. ROAS remains the most sought-after performance metric (78 per cent), followed closely by incremental sales (71 per cent), with 38 per cent of brand advertisers citing ROI demonstration as a key barrier to further investment.
“Retail media is gaining momentum, but we’re now at a pivotal stage where structure and collaboration are essential. To fully unlock the potential of this channel, the industry needs shared frameworks, clear measurement principles and greater transparency across networks. As we’ve seen in other maturing digital channels, establishing consistency is what allows innovation to scale. That’s where the IAB and its members can play a critical role,” said IAB Australia CEO Gai Le Roy.
The call for greater clarity was echoed by Lachlan Brahe, chair of the IAB Retail Media Council and commercial director at Epsilon.
“Moving into its third year, this report demonstrates growth and enthusiasm for retail media whilst reminding us where we, collectively, need to lift our game. With Retail Media becoming a staple for brands, there remain challenges for advertisers to navigate and adapt to fragmented systems and metrics. Further education is essential to support advertisers in understanding how best to leverage new formats and channels to achieve objectives and to compare performance across networks,” he said.
Now in its third year, the report reveals that the retail media ecosystem is expanding beyond grocery giants and marketplaces to include financial services, loyalty platforms and tech players. Retailers are increasingly investing in new ad formats, off-site extensions, and in-store digital screens, with 85 per cent saying they’ll enhance their measurement offerings in the next 12 months.
But understanding where and how consumers are discovering products is just as vital.
The 2025 ANZ Commerce Report, also released today by IAB and Pureprofile, explores evolving consumer shopping habits. It found that online shoppers now use an average of 4.8 touchpoints to discover new products, ranging from search and retailer-owned content to influencers and social media. Search remains dominant overall, but 59 per cent of 18-39s say social media is a key discovery tool, with 75 per cent reporting they’ve found brands through influencers.
“People are getting smarter about how they shop. They want value, but increasingly that means something different to different groups, whether it’s free shipping, finding unique pre-loved items, or discovering a brand via a TikTok creator. Marketers need to stay on top of these audience behaviours and motivations to think more holistically about what value looks like and where their audiences are making those judgments,” said Pureprofile CEO Martin Filz.
“Retailers and marketers must review their distribution and investment strategies to ensure they show up wherever their audience is seeking inspiration. Brand discovery is now happening across a growing number of environments, from social scrolls to second-hand marketplaces,” said Le Roy.
Despite ongoing economic pressures, 72 per cent of shoppers remain cost-conscious, though that’s slightly down from 75 per cent in 2024. Loyalty programs and free shipping continue to drive value perceptions, while sustainability is on the rise, though only 36 per cent of consumers say they’ll pay more for ethical products.
As for data privacy, the report found a paradox: 75 per cent of shoppers are aware their data is being used for targeting, and 73 per cent remain concerned, but 93 per cent are willing to share personal information in exchange for tangible benefits like discounts or loyalty points.
Together, the reports highlight both the promise and pressure facing retail media today: it’s no longer a fringe channel, but the infrastructure, measurement, education and consumer trust, needs to catch up.
