IAB: Digital advertising records highest double-digit annual growth in 5 years

FY21 results show all aspects of digital marketing reported double-digit expenditure increases

Australia’s digital advertising sector has recorded its highest double-digit annual growth in five years in the face of the continuing COVID-19 pandemic, chalking up more than $11 billion in total spend for the FY21 financial year.

According to the latest Interactive Advertising Bureau (IAB) Australia and PwC digital advertising expenditure figures, Australia’s digital marketing sector reported 24.2 per cent year-on-year growth to hit $11.4 billion in the 12 months to 30 June 21. The total included a 38.8 per cent jump in video advertising to $2.4 billion, along with a 29.7 per cent rise in general display to $4.4bn.

All forms of digital advertising reported double-digit growth over the 12-month period. Search and directories reported a 22.3 per cent increase to $5.1bn total expenditure for the year, while classifieds lifted 17.4 per cent to $1.9bn. Mobile rounded off the tally of strong performances, with 24.1 per cent year-on-year growth to $6.1bn.

Retail proved the biggest spending sector, representing 16 per cent of all display advertising. This was up from 11.4 per cent share in FY20 and driven by both traditional as well as pure-play companies. Also increasing share in FY21 were FMCG and technology to 7.2 per cent and 6.4 per cent, respectively. Finance remained flat and both automotive and travel were down year-on-year.

Across the board, programmatic trading continues to rise, lifting its share from 41 per cent to 43 per cent over FY21. The remainder was either purchased via agency (41 per cent) or direct (16 per cent).

In a nod to the pandemic’s impact on media consumption patterns, the IAB/PwC noted connected TV spend increased, with video spend ratios lifting 9 per cent to 47 per cent this financial year. By contrast, desktop decreased from 36 per cent to 32 per cent and mobile from 26 per cent to 21 per cent.

Specifically in the June 2021 quarter, online advertising reached $3.27bn, a 60.5 per cent jump on last year’s June quarter, which was significantly impacted by the arrival on Covid-19 on Australian shares. This also represented 13.4 per cent growth quarter-on-quarter. The IAB attributed this to the fact Australia had been open for travel, hospitality and retail during this time.

Related: IAB/PwC: Digital advertising continues double-digit growth trajectory in Q1 2021

“The growth in digital ad investment over the last year has been extraordinary and it’s clear marketers are confident using it as a key growth engine for their businesses across the broad range of available formats and environments,” IAB CEO, Gai Le Roy, stated.

“While the evolution of retailing has become a major driver of investment in digital advertising and we expect some shopping will return to physical stores in the future, the broad reach, deep engagement and data rich offerings will ensure retailers continue to place digital at the heart of their advertising and marketing plans.”  

The question is whether such growth will be sustained given the latest lockdowns across NSW and Victoria. According to Standard Media Index figures released last week, early July spend figures show expenditure remaining strong, buoyed in part by the Tokyo Olympics. The group reported figures are up 18.3 per cent on July last year, excluding late digital media bookings, or more than 40 per cent when comparing like-for-like.

SMI A/NZ managing director, Jane Ractliffe, said despite the latest Covid outbreaks, the market was so far staying the course, with no evidence of any reduced demand yet visible in SMI’s forward pacing data, which tracks the value of future confirmed advertising payments over the last three years.

Credit: iab


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