Retail and commerce media investment is continuing to grow in Australia, but the market is also entering a new phase of maturity, with buyers demanding sharper standards as they increase investment and retailers strengthening their measurement offers and expanding formats and channels, according to new research from IAB Australia.
The IAB Australia Retail and Commerce Media State of the Nation 2026 report, released today, 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% of active buyers increased spend on retailers’ own websites and apps, while 65% increased spend on retailer-powered advertising outside the retailer’s owned channels.
The Report, which is based on data collected from experienced retail and commerce media practitioners, not the broader Australian advertising market, 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.
As the category matures, 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% of active buyers, while 59% 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% of respondents.
The report also found strong support for certification as a trust signal, with 80% 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.
Gai Le Roy, CEO of IAB Australia, said “The findings show retail and commerce media are now firmly part of media planning and competing for real budgets. 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% of surveyed brands and agencies rating their experience as good, up from 44% 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% describing their retail media offering as advanced and 47% 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% planning to enhance measurement, 84% to expand formats and channels, and 84% 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% and 76% of active buyers respectively. However, retailer provision remains uneven, with 64% of retailers and commerce media networks offering incremental or sales lift measurement and 60% offering ROAS.
Additional findings from the report include:
- Retailers and commerce media networks reported revenue growth, with 93% increasing onsite revenue, 75% increasing offsite revenue and 89% increasing instore revenue over the past year.
- Increasing sales or conversions remains the dominant objective of retail and commerce media activity, cited by 90% of surveyed agencies and advertisers.
- Display and search remain the most used retail media formats, with strong forward intent for sampling, in-store digital signage, retail out-of-home and video on Connected TV.
- Measurement and internal disconnects between commercial, marketing, merchandising and media teams remain key barriers to greater adoption.
The report is based on a June 2026 survey of 92 advertising decision makers involved with retail and commerce media, including 60 senior buy-side representatives from agencies and brands with experience in retail media advertising, and 32 representatives from retailers or commerce media networks.