Latest IAB figures show Q1 2022 digital advertising buoyed by government spending

Classifieds and directories plus search show strong quarterly growth

Australian online advertising continued to grow in the first quarter of the year, buoyed by political and government spending.

According to the latest Interactive Advertising Bureau (IAB) Australia and PwC figures, digital advertising grew 19.2 per cent year-on-year in the first quarter to 31 March 2022 to reach $3.449 billion. Not surprisingly, spending around the Federal Election campaign dominated spend, with the government representing 13.5 per cent of the general display market over the quarter. This contrasted with 3.9 per cent in Q1, 2021.

On the flip side, retail experienced the biggest decline in share, dropping from 16.4 per cent to 13.5 per cent of the general digital advertising market over the quarter.

The IAB Australian Online Advertising Expenditure Report also showed general display categories up on the previous year. For example, video advertising increased 24 per cent to $715.1 million for the quarter, while in-feed / native advertising was up 5 per cent to $349.8 million. Standard display also lifted 11 per cent to $167.7m and other advertising was up 68 per cent to $21.5m.

Classifieds and search and directories also grew quarter on quarter, increasing 4.3 per cent and 3.6 per cent respectively.  Another notable finding was that search and directory spend in the quarter seized share from general display advertising, buoyed by the recovering travel sector. The IAB also noted general display advertising seasonally contracted by 15.1 per cent expected in the annual spending cycle. 

Programmatic advertising as a share of inventory grew 1 per cent on prior quarter bookings, bringing it to 42 per cent of spend. The IAB pointed out this is equal to the percentage of agencies buying by insertion order. Direct bookings remained relatively stable at 16 per cent. 

“The digital ad market saw solid investment growth for the March quarter compared to the previous year with the standard slight seasonal decline from the December quarter,” IAB Australia CEO, Gai Le Roy, commented. “The make-up of the top advertiser categories was greatly disrupted by significant ad spend from the political parties and independents early into the campaign for the Federal Election.”

The latest figures reflect a similar picture painted by Standard Media Index in its March quarter findings, released earlier this month. These showed Australia had experienced 14 consecutive quarters of growth, with advertising demand lifting 2.8 per cent during the first three months of the calendar year including a 19.2 per cent increase in digital advertising. SMI reported FY22 to date shows advertising spend breaking through the $6bn market.

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