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Retail and commerce media investment is growing in Australia but entering a new phase of maturity, with buyers demanding better measurement as they increase spend, according to IAB Australia's Retail and Commerce Media State of the Nation 2026 report.
The report found advertisers increased spend across all main retail media channels over the past year.
Almost two-thirds (63%) of active buyers lifted spend on retailers' own websites and apps, while 65% increasing spend on retailer-powered advertising outside of owned channels.
The report was based on a June 2026 survey of 92 advertising decision makers involved with retail and commerce media.
The findings identified retail media as increasingly competing for established advertising budgets, with nearly half of investment now reallocated from other channels rather than representing new spend.
Trade retail budgets and traditional advertising were found to be the largest sources of that reallocated spend.
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.
"The findings show retail and commerce media are now firmly part of media planning and competing for real budgets," said Gai Le Roy, CEO of IAB Australia.
"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."
Measurement remains the defining barrier, with inconsistent metrics and definitions across networks cited as the top measurement challenge 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.
Incremental sales measurement and ROAS are the most sought-after metrics from retail media partners, cited by 83% and 76% of active buyers respectively.
Retailer provision remains uneven, with 64% of retailers and commerce media networks offering incremental or sales lift measurement and 60% offering ROAS.
Strong support for certification as a trust signal emerged, 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.
Just 22% of retailers and commerce media networks described their retail media offering as advanced, with 47% describing it as still developing.
Retailers indicated they are investing in the next stage of capability over the next 12 months, with 84% planning to enhance measurement, expand formats and channels, and expand their first-party data offering.
More than half also intend to explore and adopt AI technologies, with the greatest opportunities seen in data analysis and insights, audience targeting, and measurement and reporting.
Retailers and commerce media networks reported revenue growth, with 93% increasing onsite revenue, 75% increasing offsite revenue and 89% increasing in store 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.
Lachlan Brahe, chair of the IAB Australia Retail Media Council, said the findings pointed to an industry maturing at pace.
"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," said Brahe.
"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."
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