News
Retail Media in Australia Is Booming. Buyers Still Can't Measure the ROI.
IAB Australia's July 2026 State of the Nation report found nearly half of retail media investment in Australia is reallocated from other channels, not new budget, while 73% of buyers cite inconsistent metrics and 59% cannot reliably measure ROAS. For DTC brands, that means retail media growth is largely a channel-mix shift you cannot yet measure well.
Key Takeaways
- 63% of active Australian shoppers increased spend on retailers' own sites and apps, and 65% increased spend via retailer-powered advertising outside those owned channels, per IAB Australia's July 2026 report.
- Nearly half of retail media investment was reallocated from other channels, not net-new budget, meaning brands are shifting dollars into a channel most cannot yet measure well.
- 73% of buyers cite inconsistent metrics as their leading measurement challenge and 59% struggle to measure ROAS or ROI, even though 90% say increasing sales is the main objective and 76% want ROAS reporting.
- 48% prioritise ad effectiveness when choosing a retail media partner and 80% say IAB certification influences the decision, but 86% already juggle three or more partners, which multiplies the measurement problem.
- Partner experience is improving (66% rated it good, up from 44% the year before) and 93% of retailers saw onsite revenue grow, but the CFO discipline is unchanged: do not reallocate budget into a channel you cannot measure incrementally against the one you pulled it from.
If you run finance for an Australian DTC brand, retail media has quietly become a real line item, and IAB Australia's new report just confirmed both halves of that story: the growth is real, and most buyers still cannot measure it properly. That gap sits right next to the channel-mix questions we cover in our Meta, Google and TikTok spend benchmarks, because retail media is not growing in a vacuum, it is pulling dollars from somewhere.
Here is what the report found, and the discipline it should force onto your budget process.
What happened
As reported by eCommerce News Australia, IAB Australia's Retail and Commerce Media State of the Nation 2026 report, released in July 2026, found strong growth across the category. 63% of active buyers increased spend on retailers' own sites and apps, and 65% increased spend on retailer-powered advertising outside those owned channels. On the retailer side, 93% saw onsite revenue increase and 89% saw in-store revenue increase. IAB Australia CEO Gai Le Roy said "the next phase will be about making it easier for advertisers to invest with confidence," and IAB Retail Media Council Chair Lachlan Brahe called the growth and rising sophistication "encouraging signs for the industry."
The harder number sits underneath the growth headline. Nearly 50% of retail media investment was reallocated from other channels rather than net-new budget, and measurement has not kept pace with that shift: 73% of buyers cite inconsistent metrics as their leading challenge and 59% struggle to measure ROAS or ROI. Buyers are responding by picking partners on capability rather than reach: 48% prioritise ad effectiveness when choosing a retail media partner and 80% say IAB certification influences the decision, though 86% already juggle three or more partners at once.
| IAB Australia State of the Nation 2026 | Figure |
|---|---|
| Report released | July 2026 |
| Buyers increasing spend on retailer owned sites/apps | 63% |
| Buyers increasing spend via retailer-powered advertising off-site | 65% |
| Retail media investment reallocated from other channels | Nearly 50% |
| Buyers citing inconsistent metrics as leading challenge | 73% |
| Buyers struggling to measure ROAS/ROI | 59% |
| Buyers prioritising ad effectiveness in partner selection | 48% |
| Buyers saying IAB certification influences the decision | 80% |
| Buyers working with 3+ retail media partners | 86% |
| Retailers reporting increased onsite revenue | 93% |
Source: eCommerce News Australia, reporting on IAB Australia's Retail and Commerce Media State of the Nation 2026 report.
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The reallocation problem is the CFO problem
Start with the number that matters most to a finance seat: nearly half of retail media spend is money that used to sit somewhere else. That is not incidental. It means retail media growth in Australia is largely a channel-mix decision dressed up as category growth, and channel-mix decisions are exactly the kind of move that needs a before-and-after measurement discipline, not a new dashboard you check occasionally.
The problem is that the buyers making this move mostly cannot measure what they are getting. 73% cite inconsistent metrics as their top challenge and 59% cannot reliably measure ROAS, even though 90% of advertisers say increasing sales is their main objective and 83% specifically want incremental sales measurement. Put simply: brands are pulling budget out of channels they can measure, Meta, Google and TikTok chief among them, and into a channel most of them admit they cannot measure well. Our channel mix benchmarks are the right place to check what you are actually giving up before you make that trade.
Do not reallocate what you cannot measure
The rule here is simple and it is one every paid channel should already follow: do not shift budget into a channel you cannot measure incrementally against the channel you pulled it from. Retail media does not get a pass on that just because it is new, growing, and reported to you by the retailer running it.
In practice that means running retail media through the same lens you would apply to any paid test. Fold it into your blended MER rather than judging it on a partner-reported ROAS number in isolation, since a retail network grading its own placement has every incentive to report a flattering figure. Our MER, ROAS and CAC breakdown is built for exactly this: reading the three numbers together so a strong self-reported ROAS from one channel does not mask a weaker blended picture across the account.
Pick partners on measurement, not reach
The report shows the market is already sorting on this. 48% of buyers now prioritise ad effectiveness over reach when choosing a retail media partner, and 80% say IAB certification influences the decision. That is the discipline to copy: ask a prospective partner for its measurement methodology and whether it supports independent verification before you ask about audience size or placement inventory.
It gets harder at scale. 86% of buyers already work with three or more retail media partners, which means most AU DTC brands of any size are reconciling three or more separate, self-reported dashboards against one P&L. That is the same discipline problem a brand like Shaver Shop has had to solve on the merchandising side, protecting margin by being selective about which channels actually earn their spend rather than accepting every retail placement on offer. See our Shaver Shop margin teardown for how that discipline shows up in the numbers. And if an agency is the one managing your retail media reallocation, check what that management is actually costing you against scope in our media agency retainer true cost breakdown before you add another managed channel to the retainer.
The operator takeaway
Retail media in Australia is genuinely growing, 93% of retailers are seeing onsite revenue gains and buyer sentiment on partners is improving, up to 66% rating the experience good from 44% the year before. None of that is the risk. The risk is that nearly half of the money funding that growth is being pulled from channels you can already measure, and moved into one that 59% of buyers admit they cannot measure reliably. Treat retail media like any paid channel: demand a consistent ROAS or incrementality read before you reallocate, fold it into your MER, and pick partners on measurement discipline, not reach. If you want a second set of eyes on that reallocation before you move the next dollar, our team runs exactly this kind of channel-mix and measurement review.
Frequently Asked Questions
what did iab australia's state of the nation 2026 report find?
Released in July 2026, IAB Australia's Retail and Commerce Media State of the Nation report found strong growth on both sides of the market. 63% of active buyers increased spend on retailers' own sites and apps, and 65% increased spend on retailer-powered advertising outside those owned channels. On the retailer side, 93% saw onsite revenue grow and 89% saw in-store revenue grow. But the report's sharper finding is on measurement: 73% of buyers say inconsistent metrics are their leading challenge and 59% struggle to measure ROAS or ROI reliably, even as the category keeps attracting budget.
how much retail media spend is actually new money versus reallocated?
Nearly half. The report found close to 50% of retail media investment was reallocated from other channels rather than net-new budget. That is the number DTC finance teams should sit with. If half the dollars going into retail media are coming out of Meta, Google, TikTok or agency retainers, this is not incremental growth spend, it is a channel-mix decision, and channel-mix decisions need the same before-and-after measurement discipline as any budget shift. Our channel mix benchmarks (/blog/marketing-channel-mix-benchmarks-meta-vs-google-vs-tiktok) are a useful baseline for what you are actually pulling from.
why can't advertisers measure retail media roas reliably?
Two compounding problems. First, 86% of buyers already work with three or more retail media partners, so performance data is scattered across separate dashboards with different definitions of a conversion, a view, or an attributed sale. Second, retail media networks generally report on their own walled-garden terms, not on a common measurement standard, which is exactly what 73% of buyers flag as inconsistent metrics. Add those together and you get 59% of buyers unable to measure ROAS with confidence, even though 76% say they want ROAS reporting from their partners.
which australian retail media networks does this affect?
The report covers the category broadly rather than naming individual networks, but the growth it describes tracks with the retailer ad networks that have scaled fastest in Australia: Coles 360, Woolworths' Cartology, Amazon AU's advertising business and Chemist Warehouse's retail media offering among them. Each runs its own reporting environment, which is precisely why 86% of buyers working with three or more partners describes most mid-market AU DTC brands' current setup, and why the measurement problem compounds rather than averages out.
how should a dtc brand decide whether to reallocate budget into retail media?
Treat retail media like any other paid channel: no reallocation without an incrementality read. Before shifting spend out of Meta, Google or TikTok and into a retailer ad network, define how you will measure the retail media placement's actual lift, not just its self-reported ROAS, and hold that measurement to the same bar you would apply to a new paid channel test. Fold the result into your blended MER rather than looking at retail media ROAS in isolation. Our MER, ROAS and CAC breakdown (/blog/mer-roas-cac-marketing-efficiency) is the framework for reading the three numbers together instead of trusting one partner-reported metric on its own.
what should i look for in a retail media partner?
Follow the buyers who are already ahead of the market: 48% prioritise ad effectiveness over reach when choosing a partner, and 80% say IAB certification influences the decision. In practice that means asking a prospective retail media partner for its measurement methodology before you ask about audience size, checking whether it will support independent or third-party measurement rather than only self-reported dashboards, and confirming it holds IAB accreditation. A brand like Shaver Shop (/blog/shaver-shop-teardown) built its margin position by being disciplined about which channels actually earn their spend, and that same discipline applies to a new retail media line item.
does retail media replace meta and google spend for australian dtc brands?
Not cleanly, and that is the point. Retail media sits closer to the bottom of the funnel, capturing shoppers who are already on a retailer's site or app, while Meta, Google and TikTok are still doing the demand generation that gets shoppers there in the first place. Treating retail media as a straight swap risks starving the channels that build the traffic retail media depends on. If you are also paying an agency to manage that reallocation, check what it is actually costing you against scope (/blog/media-agency-retainer-true-cost) before you add a new managed channel on top.