The IAB Australia Retail Media State of the Nation 2025 Report shows seven in 10 advertisers and agencies engaged in retail media have increased their investment over the past year. But frustrations with clear, standardised measurement and transparency within the retail media sector is growing.

The report found a notable 77% of advertisers and agencies are now collaborating with three or more retail media networks, a rise from 58% in the previous year. The investment in retail media is sourced from a combination of fully reallocated budgets, accounting for 35%, and new budgets, which make up 19%. Brands are reportedly redirecting their spending from trade marketing and traditional media, while agencies are reallocating funds from social media and digital display budgets.

However, advertisers have expressed frustration over the absence of clear, standardised performance metrics across different networks. Return on Advertising Spend (ROAS) has been identified as the most critical metric by 78% of agencies and brands, with incremental sales measurement following at 71%. The primary obstacles to increased investment in retail media include demonstrating return on investment, cited by 38% of brand advertisers, and measurement and reporting limitations, noted by 30% of agencies.

The IAB’s report noted the scope of retail media is broadening beyond major supermarkets and marketplaces, extending to financial services, tech companies, and loyalty platforms. In the next 12 months, 85% of retailers aim to enhance their measurement offerings, while 77% plan to expand ad products and channels.

The predominant goal for retail media activities is to boost sales, as indicated by 83% of agencies and advertisers. Additionally, 76% cite increasing purchase intent or action as a key objective. Retailers perceive influencing customers across the entire purchase funnel as the primary opportunity.

Agency planning and strategy teams are undergoing restructuring to incorporate retail media, while retailers are hiring additional resources. On-site search or sponsored products are the most utilised retail media advertising products, with on-site display and in-store digital signage also being highly used. Off-site extensions powered by retailer data have seen a 19-point increase.

CEO of IAB Australia, Gai Le Roy, commented, “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.”

Chair of the IAB Australia Retail Media Council and Commercial Director at Epsilon, Lachlan Brahe, stated, “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.”

The report is based on a survey conducted in June 2025, involving 161 senior advertising decision-makers. Among the buy-side respondents, 66% were from advertising agencies, and 34% were from brands. Information was also gathered from 19 retailers with a retail media offering.