Report: Latest numbers show smaller rise in digital advertising spend

The industry’s latest report shows the value of digital advertising has grown by a smaller margin over the last financial year compared to the previous one

Australian brands and agencies spent $9 billion on digital advertising in the 2019 financial year, a jump of 7.1 per cent from the previous year, according to the latest Interactive Advertising Bureau (IAB) Online Advertising Expenditure Report.

CEO, IAB Australia, Gai Le Roy, said in a statement it’s steady digital growth within a challenging advertising environment. 

“It’s clear small and medium business investment in digital is growing at a higher rate than traditionally larger advertisers. There are also some key category shifts," she said. "Automotive is again the largest advertiser category for display. But for the first time it is also the largest video advertising category - taking over from FMCG as their spend softens.”

The report, now in its 12th year and prepared by PwC, found the growth in 2019 of 7.1 per cent was smaller than in 2018, when it increased by 11 per cent. According to the IAB, this reflected the downturn in Australia’s overall advertising market. Search and directories showed the strongest growth, with a rise of 8 per cent in the 12 months to 30 June 2019, while general display and classifieds grew by 7.4 per cent and 4.2 per cent respectively.

“Australian businesses are operating in a challenging low growth environment. Investment in marketing is an essential tool for businesses to grow their available market to achieve growth,” said chief economist, PwC Australia, Jeremy Thorpe, in a statement.

In terms of the breakdown of digital advertising spend, search and directories accounts for 45 per cent of the total spend of $9 billion and general display represents 45 per cent and classifieds 18 per cent.

Video and mobile continue to dominate 

The report also shows the growing popularity of mobile, with total mobile advertising market, including search and display, increasing by 28.4 per cent to $4.6 billion over the 2019 financial year. It predicts the rollout of 5G mobile network, with faster data transfer speeds, will see continuing growth in this segment.

Total video advertising is at $1.5 billion, a rise from the previous year and is the fastest growing format of the $3.4 billion display market and now accounts for 44 per cent of total display. 

The IAB report also shows total online spending is up 5 per cent year-on-year to reach $2.3 billion, according to Q2 2019 results. Search and directories grew by 10.3 per cent compared to the same quarter in 2018 to $1.16 billion, display grew by 4.3 per cent and video also rose by 16.7 per cent, while classifieds was down by 5.9 per cent, which the report attributes to declining consumer confidence.

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