Retail media in Canada: what’s driving the growth?

Retail media has quickly moved from a niche shopper tactic to one of the most talked-about areas of the Canadian advertising market.

On paper, the appeal is obvious. Retailers have what many marketers are looking for right now: first-party data, purchase behaviour, loyalty signals, basket-level insights and a clearer connection between media exposure and sales. In a world where targeting is harder, cookies are less reliable and marketing budgets are under more pressure, that sounds like a very compelling answer.

But the real story is not just that retail media is growing. The more important question is what kind of growth we are seeing and what it means for the rest of the media plan.

Emarketer forecasts Canadian retail media spending will reach approximately C$3.8 billion in 2026, building on a channel that already accounted for roughly one-fifth of digital ad spending in 2025. That growth is being fuelled by ecommerce, retailer monetization, first-party data and the ongoing demand for more measureable media investment.

But it is not all “new” money. A meaningful share of retail media growth is coming from existing budgets being reclassified or redirected. Historically, retail media was largely funded through shopper and trade dollars. Today, more investment is coming from brand media, ecommerce and performance budgets. In many cases, dollars are being pulled from programmatic, open-web display, print and even traditional linear TV.

That shift matters. Because when retail media starts taking money from broader brand channels, the planning bar needs to be higher.

Retail media should not simply be treated as a place to move money because it is closer to the sale. The closer we get to the transaction, the easier it is to overvalue what is immediately measurable and undervalue what created the demand in the first place. Brand familiarity, mental availability, context, pricing, packaging, distribution and previous experience all shape purchase decisions long before someone searches, clicks or adds to cart.

So the planning question needs to change. It should not be, “How much should we spend with each retailer?” It should be, “What commercial behaviour are we trying to influence?”

Are we trying to launch a new product? Drive household penetration? Defend share? Increase repeat purchase? Win a category moment? Support a retailer relationship? Learn more about a specific shopper segment? Retail media can play a role in all of these, but the role should be defined by the business objective not by the media product being sold.

The other major shift is programmatic. Retail media is no longer limited to sponsored search or onsite placements within a retailer’s own environment. Retailer audiences are increasingly being activated offsite across CTV, digital video, display and broader programmatic channels.

Partnerships like The Trade Desk x Instacart and Bell x Loblaw Advance point to where the market is going. Retail and commerce data can now help inform broader media activation, not just lower-funnel retail placements. That creates a real unlock for brands: better shopper signals, more scalable activation and a stronger connection between media planning and purchase behaviour.

But it also introduces new complexity. As retailer data moves across channels, marketers need to ask sharper questions around duplication, transparency, measurement consistency and incrementality. Just because a buy is powered by retailer data does not automatically mean it is more effective, more incremental or more valuable than other media options.

AI will add another layer. On the media side, AI will accelerate bidding, optimization, audience modelling, dynamic creative, budget allocation and product feed management. On the shopper side, it will change how people search, compare, read reviews, discover products, build recipes, receive recommendations and eventually shop through agents.

That means retail media may influence not only where ads appear, but how products are discovered and chosen.

This is why measurement needs to mature. Retailer-reported return on ad spend (ROAS) is useful, but it cannot be the only proof point. Marketers need to push further into incrementality, attribution windows, baselines, halo effects, cannibalization, cross-retailer duplication and long-term brand impact.

Retail media’s biggest opportunity is not to pull every dollar closer to the bottom of the funnel. It is to make the total plan smarter.

The next phase in Canada should be less about buying more retailer inventory and more about using commerce signals with discipline. It should be about connecting brand, shopper, trade, performance and measurement in a more intentional way. Retail media is growing up. Now the strategy needs to grow with it.

Authors:  
Rita Steinberg, Vice President, Media, FUSE Create 
Trevor Cresswell, Strategic Partner Manager, Industry Relations, Google