IAB, SMI latest figures show buoyancy of Australia's ad spend

2021 figures from IAB and Jan 2022 figures from SMI both show the appetite for digital advertising and getting the message out there is not only resilient, it's growing

The latest IAB Australia and SMI advertising reports paint a stellar picture of Australia’s advertising spend and appetite during 2021 and into the New Year despite the ongoing pandemic conditions and social setbacks of December and January’s influx of cases.  

According to the Interactive Advertising Bureau (IAB) Australia figures produced in partnership with PwC, online advertising market spend neared $13 billion in the 2021 calendar year, up 35.8 per cent on the preceding year. The hefty result comes off the back of two years of slow growth for the industry at 2.4 per cent and 5.6 per cent in 2020 and 2019, respectively.  

The top growth area for digital spend was video advertising, which was up 48 per cent year-on-year to $2.88bn. However, the IAB noted classifieds, which had been the hardest hit digital advertising revenue stream over the last two years, bounced back in 2021 to rise 41.5 per cent compared to 2020 ($2.2bn).  

Across other digital ad categories, general display advertising was up 38.2 per cent to $5.1bn in 2021, while search and directories jumped 31.7 per cent per cent to $5.7bn.  

Across sectors, retail proved the number one advertiser category in 2021, accounting for 16.3 per cent share of the general display market. This was up from 15.6 per cent a year earlier. The auto category dropped back in share to 10.7 per cent from 12.9 per cent in 2020. However, figures indicated slightly stronger auto investment in early 2022, IAB said.  

Total programmatic spend was flat at 42 per cent, but investment via programmatic guaranteed (PG) did increase by 2 per cent to reach 13 per cent in 2021.  

IAB Australia CEO, Gai Le Roy, saw two factors driving up digital advertising spend.   

“Businesses have accelerated their digital transformation and investment over the last two years, but we’ve also seen a resurgence in marketing spend by businesses to drive economic growth as we exit Covid lockdowns and restrictions,” she commented.  

Helping buoy overall 2021 figures was a strong final quarter for online advertising revenue. According to the IAB/PwC report, this increased 21.3 per cent compared to the December quarter in 2020 to reach $3.58bn.  

Contributing to this growth was the travel industry, which finally picked up in the last quarter of the year to hit 4.5 per cent. This was almost double share in December 2020, but still significantly trails share recorded in 2019.  

SMI January results show ongoing ad spend growth  

The latest SMI figures paint a similarly optimistic picture of ad spend across media agencies more broadly.  The group reported January 2022 ad spend is up 15.4 per cent year-on-year and now 5.1 per cent above pre-Covid figures reported in January 2019.  

That result further strengthened the record figures SMI had already seen across this financial year. So far, ad spend is up 16.1 per cent and has moved through the $5 billion mark for the first time in this seven-month period.  

Credit: SMI

SMI A/NZ managing director, Jane Ractliffe, said the results were a further testament to the strength of the Australian advertising economy as it continues to move well past the Covid era.

“The value of Australia’s advertising market in January is not only well above pre-Covid levels but also 4.5 per cent above the last record level of January ad spend set in 2018, which underscores the strength of the ad demand we’re currently experiencing,” she said.  

In line with the IAB’s figures, SMI reported digital media again as the largest standalone media in January with revenues up 18.7 per cent. The strongest growth was seen in social media. Also in complement to IAB’s figures, SMI showed total ad spend into digital video was up 18 per cent.  

More widely, TV ad spend continued to grow, up 18.9 per cent. Helping lift this channel was the return of the Australian Open tennis tournament into the January timeframe. Out-of-home media and cinema also continued to chalk up growth as they both recovered from pandemic conditions.  

However, Ractliffe said SMI data showed the current level of ad demand was being fuelled by a concentrated number of product categories, with 18 major categories reporting lower ad spend than in January 2019.  

“The growth in Government category ad spend is underpinning the market, but there are many large categories which are spending less now than in January 2019 with key examples being retail, domestic banks and of course automotive brands,” she said.  

Don’t miss out on the wealth of insight and content provided by CMO A/NZ and sign up to our weekly CMO Digest newsletters and information services here.  

You can also follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page    



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