But as brands rush to follow consumers closer to the checkout, they must be careful to keep giving them reason to put their products in the basket. 

According to IAB Australia’s 2026 Retail and Commerce Media State of the Nation report, 87% of surveyed advertising decision-makers now consider retail media a significant or regular part of their activity. Over the past year, 63% of active buyers increased investment, while 65% increased investment in retailer-powered advertising outside those environments. 

But perhaps the more interesting stat isn’t how quickly retail media is growing. It’s where the money is coming from. The same study found that nearly half of retail media investment is now fully reallocated from other channels. Retail media isn’t always growing the advertising pie. It’s eating its slice then eyeing off everyone else’s. 

This raises an important question: as investment is redirected towards the point of purchase, are incremental sales being delivered while still investing enough in everything that needs to happen beforehand? 

The seduction of the sale 

The appeal is obvious. Retailer networks allow brands to influence decisions through sponsored search, onsite display, offsite targeting and in-store screens. And for retail brands, unlike many other media investments, it can often connect advertising exposure to an actual transaction. 

For marketers under pressure to demonstrate accountability, this is advertising catnip. But there’s an important distinction between advertising that generates a sale and advertising that simply turns up to take credit for it. 

Consider someone searching for their usual coffee brand. They see a sponsored listing, click and purchase. The network records a conversion. Everyone is happy. But would they have bought it anyway? Quite possibly. 

This is the difference between attributed and incremental sales. Attribution tells us what happened following an advertising interaction. Incrementality tells us what happened because of it. 

And when budgets are allocated on attributed returns alone, channels closest to the transaction have an inherent advantage.  

Follow the money 

IAB Australia’s 2025 research found that 35% of retail media investment was fully reallocated from existing budgets, while 19% came from new budgets. Brands are shifting spend from trade marketing and traditional media, while agencies were reallocating social and digital display investment. 

By 2026, nearly half was being fully reallocated. 

Retail media isn’t simply attracting new advertising investment. It’s competing for money previously spent elsewhere. 

Trade marketing traditionally influences shopper behaviour. Performance media captures demand and drives conversion. Brand investment builds awareness, preference and future demand. 

Retail media can credibly contribute to all three, particularly as an evolution of trade marketing. 

The problem arises when it starts stealing from brand building, potentially undermining the foundations that make it effective. 

Reduce broad-reach brand investment to fund more retail media, and brands risk developing increasingly sophisticated ways to convert an increasingly familiar group of customers. 

A remarkably efficient way to optimise a shrinking pool of potential buyers. 

The measurement trap 

Retail media isn’t necessarily creating a measurement problem. It’s exposing one that has existed across digital advertising for years. 

We’ve become comfortable evaluating fundamentally different marketing activities using identical short-term metrics. 

A brand campaign introducing a product to new consumers might not generate immediate sales. A retail media campaign targeting someone already searching for that product probably will. 

When every investment must justify itself through immediate returns, budgets naturally gravitate towards activities that deliver them. 

The marketing mix becomes less about sustainable growth and more about producing the most convincing short-term impact on the P&L. Or at least claiming to. 

There’s also the question of measurement independence. Retail media networks can own the inventory, provide audience data and report sales outcomes. That makes transparency and independent incrementality measurement increasingly important. 

IAB Australia’s 2026 research found 73% of active buyers cited inconsistent metrics across networks as a measurement challenge, while 59% experienced difficulties measuring ROAS or ROI. 

For an industry selling itself on measurement, there’s still work to do. 

You can’t harvest what you haven’t grown 

Here’s where things get interesting. 

Retail media’s effectiveness often depends on marketing investment happening elsewhere. 

Consistent brand building creates recognition, mental availability and preference long before consumers reach a retailer’s website or supermarket aisle. 

When shoppers arrive at the point of purchase, retail media can convert that predisposition into a transaction. These activities aren’t competing. They’re complementary. 

Brand building creates future demand. Retail media helps convert it when it becomes actionable. 

A brand cutting upper-funnel investment to fund more retail media might initially enjoy stronger short-term returns. But over time, it risks weakening the demand that makes retail media effective. 

Retail media can contribute to awareness and consideration too. It isn’t exclusively a bottom-funnel channel. The important distinction is understanding whether investment is creating demand, capturing demand or both. 

Rethinking the marketing mix 

The answer isn’t to slow retail media investment or position it as brand building’s enemy. Its ability to connect shopper insights, advertising and potential impact on commercial outcomes is too valuable. 

Instead, we need to integrate it intelligently into the broader marketing mix, recognising three interconnected roles: 

1. Create demand. Invest in broad-reach channels and creative that build awareness, mental availability and preference among current and future category buyers. 

2. Capture demand. Use retail media, search and other lower-funnel channels to convert active shoppers efficiently, while measuring genuinely incremental outcomes. 

3. Grow demand. Leverage retail media insights and first-party data to identify opportunities for customer recruitment, product discovery, cross-selling and repeat purchase. 

The objective isn’t to give every channel an equal share of budget. It’s to respect their role in delivering a sustainable growth strategy. 

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