IAB, SMI spend figures show strong advertising climate continues

Digital advertising is driven by video's boon, while overall ad spend grows for ninth consecutive month

Latest figures around Australia’s advertising market’s performance in recent months reveals ad spend is more buoyant than the overall economy even as lockdowns and ongoing Covid-19 conditions impacted some spenders.  

According to the latest Interactive Advertising Bureau (IAB) Australia figures, the digital advertising market experienced 42 per cent year-on-year growth over the September quarter, reaching $3.32 billion.  

The association found video advertising to the be stellar performer within the mix, increasing its share of general display advertising to 62 per cent and by 72 per cent year-on-year to reach $784.1 million. Infeed / native advertising also grew 30 per cent in Q3 compared to last year. By contrast, standard display advertising fell 21 per cent year-on-year.  

Programmatic trading of publisher inventory also continued to rise in the September quarter and dominated buying methods for video inventory at 45 per cent of total expenditure. This contrasted with 40 per cent of advertising bought through agency insertion orders.   

Overall, the IAB reported all categories of digital advertising experienced double-digital growth compared with the September quarter in 2020. Search and directories lifted 41 per cent, general display increased 45.6 per cent and classifieds grew 37.3 per cent.   

Yet against this, a strong second quarter this year and the return of Covid-19 lockdowns in several states saw the total market decline by 1.3 per cent on the prior quarter.   

Across industry sectors, retail remained the leading advertiser category and recorded the largest share of display advertising investment at 14.4 per cent. It was also the top category for video advertising. Meanwhile, technology grew by its largest increase to reach 7.8 per cent of total spend. On the flip side, automotive spend retracted, a direct result of supply issues, while travel saw the largest decrease of all over the quarter.    

The figures come from the IAB Australia Online Advertising Expenditure Report (OAER), produced by PwC.  

“The September quarter had a mix of highs and lows with Olympics activity encouraging investment but the travel market pulling back again with local lockdowns,” IAB Australia CEO, Gai Le Roy, said. “Though investment in digital advertising market continued to impress, with the September quarter increasing 42 per cent on the Covid-impacted September 2020, but also increasing 36 per cent compared to the September 2019 quarter.”  

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

SMI also shows broader advertising spend buoyancy

SMI figures for October, also show continued buoyancy of the broader Australian advertising market as the country started to inch its way out of lockdowns.  

The group reported a 2.7 per cent increase in ad spend in October, even despite a large decline in TV bookings due to changes in NFL and AFL Grand Finals programming. The percentage gain is also 1.6 per cent higher than October 2019, meaning Australia has had its ninth consecutive month of higher ad spend.  

SMI AU/NZ managing director, Jane Ractliffe, said the results proved the advertising market was performing above many other sectors within the economy. SMI’s Forward Pacings detail indicates this buoyancy is set to continue.  

“Given the huge influx of ad spend to television last October as the AFL and NRL finals series moved due to Covid and of course the ongoing Covid restrictions in most states in October this year, we had expected the overall market to deliver lower or maybe stable year-on-year levels of ad spend. So this higher result does underscore the level of underlying demand now in the market,” she said.  

“Higher digital ad spend boosted the market – mostly due to stronger gain at social media sites – but outdoor also continued its Covid recovery by reporting a 12.7 per cent increase in ad spend.”  

Retail was also the largest sector spending overall in SMI’s figures, despite investments dipping 9.4 per cent year-on-year. The SMI attributed this to low levels of October bookings from supermarkets. Stronger government category ad spend also continued into October, with the total up 60.5 per cent year-on-year thanks to Covid messaging.  

Again, supply issues affecting the auto market were highlighted by SMI, prompting the category’s recent return to growth to dramatically reverse in October as bookings dropped 30 per cent.  

Stronger October ad demand has fed through to the market’s financial year-to-date figures, SMI said, which now show total bookings to be up 20.7 per cent on the same four months of last year. This $95 million above the amount spent over the same period in 2019.  

SMI also said the Australian market has now grown 23.2 per cent over the first 10 months of the calendar year to a level well above the amount spent in 2019.

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