Study: Aussie Ad Revenue Growth Set To Slow In 2018

Study: Aussie Ad Revenue Growth Set To Slow In 2018
SHARE
THIS



Australian advertising revenues are expected to grow by 2.9 per cent to $16 billion in 2018, according to the latest forecast from IPG Mediabrands’ media intelligence and investment division.

Magna’s most recent forecast, issued this week, sees 2018 growth lower than 2017’s expected full-year performance of 3.2 per cent, and also below Magna’s prior forecast for 2018 of 4.3 per cent.

Taking a longer view on industry growth, Magna expects total ad spend to see a 3.8 per cent, five-year compound annual growth rate (CAGR) – about half the pace seen in previous years.

Magna Australia managing director Victor Corones said: “The International Monetary Fund has reduced Australian growth expectations to 4.2 per cent on a nominal GDP basis – down from prior expectations of 5.3 per cent growth.

“This is a combination of both lower real GDP and lower inflation, both of which result in a headwind to advertising spending.

“Whilst forecasts appear initially dampened, The Commonwealth Games and several state elections are potential growth levers across the year for several media sectors. A federal election currently pegged for 2019 also has the potential to move earlier and fall into 2018.”

Magna’s study found that sectors such as travel, automotive and retail (in particular, as the Australian market awaits the impact of Amazon’s launch) are expected to grow in 2018.

One ad-spend sector Magna expects to contract in 2018 is real estate, as activity cools from pace seen in 2017.

Magna’s assessment of macroeconomics affecting future media ad spend include rising household debt, inflation outstripping wage growth, under-employment (those that are unemployed and/or seeking more employment) and flat consumer retail spending in the third quarter of 2017.

It is no surprise that digital remains the driver of ad revenue growth in Australia, and is expected to increase by 10 per cent in 2018 to reach $9 billion.

Australia remains one of the most advanced digital advertising economies globally, with the fourth-highest digital share of media spend expected in 2018, at 57 per cent of total budgets.

Search is predicted to increase 7.7 per cent in 2018, fuelled by an increase of new features and innovation such as location-based search, shopping feeds and integration of search features in more devices, giving advertisers more opportunity to connect with customers, according to Magna.

However, diversification of social media through players like Facebook, Snapchat and Pinterest are expected to place pressure on the growth of search.

Social media is expected to see continued growth in ad spend of 18.1 per cent.  The rise of news feeds, diversification of social platforms and increased mobile usage are seen as key drivers in 2018.

Total digital display investment is expected to remain close to flat.

Across the total digital ecosystem, mobile will attract close to 54 per cent of spend.  By 2022 Magna predicts mobile will account for as much as 72 per cent of all digital ad spend in Australia.

Screen video advertising, which includes linear, catch-up and video streaming services, is expected to see 2 per cent growth in 2018 and a 1.9 per cent five-year CAGR.

Video is by far the standout performer, expected to see 21.7 per cent growth in 2018 and a 17.8 per cent five-year CAGR.

Linear TV is expected to see a 4 per cent decline in 2018 and 6 per cent contracted CAGR. This is partly a reflection of how TV networks are shifting their business model into newer revenue streams, such as streaming, that are currently classified under digital, Magna noted.

The study says linear TV’s greatest challenge is how best to diversify revenues while continuing to protect the dominant revenues of their broadcast services.

“The clock is ticking on this scenario,” Corones said. “As consumers continue to seek out content across multiple devices and platforms, linear TV channels face audience declines, which in turn is driving inflation for this medium.

Victor Corones

Magna’s Victor Corones

“The concept of clients paying more for less is always challenging, even for such a powerful and dominant medium such as linear TV.

“All three major commercial TV networks spoke about their digital streaming capabilities in their upfronts going into 2018, particularly as connected TV apps start to deliver audiences at scale.

“This lays an important foundation for new revenues, so getting the consumer and experience right are critical.”

Magna’s report says out-of-home (OOH) ad spend is expected to see growth of 6.6 per cent in ad spend in 2018, with digital OOH expected to increase by 15 per cent and account for close to half of ad spend within this sector. Traditional OOH is forecast to remain flat.

Radio growth is pegged to 1 per cent year-on-year growth, while print continues to see precipitous declines, and expectations for 2018 are for contraction rates worse than 20 per cent for both magazines and newspapers.

Please login with linkedin to comment

Advertising Revenues MAGNA

Latest News

Clems Syd & Extra GUM Unveil YouTube Digital Stage
  • Media

Clems Syd & Extra GUM Unveil YouTube Digital Stage

YouTube EXTRA Gum has launched EXTRA Support Acts, a program created to support Australia’s up and coming musicians by transforming pre-roll ads on YouTube into a digital support stage. It has been created in partnership with Clemenger BBDO Sydney as creative lead, Universal Music Australia and BRING for talent and music strategy and content, MediaCom and YouTube. The […]

Damien Terakes Joins Havas Media As Client Services Director
  • Advertising
  • Media

Damien Terakes Joins Havas Media As Client Services Director

Havas Media Group has appointed Damien Terakes as client services director. Following multiple new business wins and continued agency growth, the position will see Terakes take on a senior management role across all Havas Media clients in Australia as well as several global accounts. Terakes has built an impressive media career, with more than 30 years’ experience as […]

Cindy Gallop’s Six Principles For Creating Experiences That Connect
  • Marketing

Cindy Gallop’s Six Principles For Creating Experiences That Connect

The inimitable Cindy Gallop returned to Australia this week to give a high-energy, 15-minute presentation at Adobe Symposium on the six key principles for creating experiences that connect.  According to the founder and CEO of MakeLoveNotPorn,  these principles also apply to successful relationships in life as much as business. Without further ado, here they are (in her own words): […]

by B&T Magazine

B&T Magazine
OMD Australia Tops 2018 RECMA Rankings
  • Media

OMD Australia Tops 2018 RECMA Rankings

OMD Australia has taken the top spot for Australia’s Number 1 media agency in size, according to RECMA’s 2018 ‘Overall Activity Volume Rankings’ report released last week. Additionally, the company was named first in profile classification with a dominant profile for the 3rd consecutive year, along with vitality ranking and structure ranking. Furthermore, OMD Australia was also named […]

Former Google Exec Joins HubSpot As APAC Managing Director
  • Technology

Former Google Exec Joins HubSpot As APAC Managing Director

HubSpot has appointed Ex-Googler Shahid Nizami as MD of the Asia Pacific region. In his new role, Shahid will be responsible for HubSpot’s performance across Australia, New Zealand, Southeast Asia, and India and will be based in HubSpot’s Singapore office, working closely with the teams based in both Singapore and Sydney. Before joining HubSpot, Nizami led the […]

Red Agency Bolsters Sydney Team
  • Media

Red Agency Bolsters Sydney Team

Judging by the image, it seems Red Agency may have had no staff whatsoever prior to this hiring spree.

Nine Appoints Editor For 9Honey
  • Media

Nine Appoints Editor For 9Honey

B&T's editor coincidentally spilled honey on his shirt while typing this. And by typing, we mean copy and pasting.

Y&R Sydney Scores Best&Less   
  • Advertising
  • Media

Y&R Sydney Scores Best&Less  

Y&R wins Best&Less amid rumours the clothing shop its changing name to 'Somewhat OK&Reasonably cheap'.

Women In Media Profile: Judy Sahay
  • Media

Women In Media Profile: Judy Sahay

B&T's Women in Media profiles are like a wave washing over you. Even more so if an actual wave washes over you.

by B&T Magazine

B&T Magazine
How B2B Companies Can Use Their Customer Data More Effectively (And Why They Need To)
  • Marketing
  • Opinion

How B2B Companies Can Use Their Customer Data More Effectively (And Why They Need To)

In this opinion piece, SalesPreso co-founder and CMO Joel Thomson (pictured below) explains how B2B companies can use their data more effectively and deliver a personalised customer experience that matches their B2C counterparts. From the Cambridge Analytica scandal to the EU’s recent GDPR legislation, this year has prompted individuals all over the world to consider […]

Opinion

by B&T Magazine

B&T Magazine
M&C Saatchi Launches THIS Film Studio
  • Advertising
  • Marketing
  • Media

M&C Saatchi Launches THIS Film Studio

Not one to rest on its laurels, M&C Saatchi unveils new production studio it hasn't called 'Not One To Rest On Laurels'.

Creative Agency Launches Project Management Tool ‘Hassl’
  • Advertising
  • Technology

Creative Agency Launches Project Management Tool ‘Hassl’

Yesterday at TedX Melbourne the team behind award-winning, Melbourne-based agency Your Creative launched their new tech venture Hassl, the project management platform taking on Trello and the likes. With the belief there was a better design solution to project management, the platform has been developed over the last two years in collaboration with their clients. […]

ABC Axes Tom Ballard’s Tonightly
  • Media

ABC Axes Tom Ballard’s Tonightly

It's one of the ABC's edgier, controversial shows, but Tom Ballard's proven too edgy and controversial for ABC chiefs.

Taboola Strengthens APAC Programmatic Offering With New Partnership
  • Advertising
  • Media

Taboola Strengthens APAC Programmatic Offering With New Partnership

Global discovery platform Taboola has announced a strategic partnership with Wider Planet, Korea’s largest demand-side and data management platform. The partnership builds on Taboola’s programmatic efforts in Asia-Pacific, and will bring together Korea’s largest demand platform for agencies and brands to provide access to Taboola’s global audience through premium publisher placements. The partnership means advertisers […]

The Haus Picks Up Two New Clients
  • Marketing

The Haus Picks Up Two New Clients

The Haus announces two new client wins. Admittedly, not as good as winning three, but far better than losing four.

businessman using tablet PC and information communication technology concept. IoT(Internet of Things). GUI(graphical user interface). paperless office.
  • Marketing
  • Technology

Smartly: The Future Of Martech Is Automated

Automated ad buying platform, Smartly was at the centre of the tech innovation stage at the Online Retailer conference 2018. Smartly head of ANZ Marta Bonzanini (pictured below) discussed the integral role automation plays in the future of marketers and creatives. “If an ad is not performing as well as planned, you probably have some […]

Messenger Launches Video Chat AR Games
  • Technology

Messenger Launches Video Chat AR Games

For the moments when we can’t be together IRL, Messenger video chat helps you connect in real-time with the people you care about most. Chatting face-to-face live makes all the difference when you have exciting news to share, you need a study buddy for a big test, or you simply want to pass the time […]

Sphere Wins Stockdale And Leggo
  • Media

Sphere Wins Stockdale And Leggo

Sphere snares Stockdale & Leggo business, which is a real estate group & not a simmer sauce as first reported on B&T.

Aussie AgTech Start-Up Leads Global Farming Innovation
  • Technology

Aussie AgTech Start-Up Leads Global Farming Innovation

With Aussie farmers facing so many challenges, could the answer be Blockchain technology? Ranking top 10 at this year’s Overseas Talent Entrepreneurial Conference (OTEC), pitching against 32 other start-ups from around the world, Aussie start-up Agunity are leading AgTech innovation. Having won the right to represent Australia during Investible’s nation-wide pitch competition, AgUnity took to […]

Women In Media Profile: Carolyn Bollaci
  • Media

Women In Media Profile: Carolyn Bollaci

Facebook's Carolyn Bollaci is the latest to sup at B&T's truth serum we prefer to call our Women in Media profiles.

by B&T Magazine

B&T Magazine