IPG Study: Aussie Ad Spend Per Head Now Second Only To The US

IPG Study: Aussie Ad Spend Per Head Now Second Only To The US
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The Australian advertising economy will increase by three per cent this year, according to the latest forecast by IPG Mediabrands’ media intelligence and investment division, MAGNA.

The new forecast is in line with previous MAGNA estimates for this year and sees a similar level of growth to 2017. 

Australia remains one of the most advanced and most intense advertising economies, with ad spend per capita of just under $500 per year, second only to the US. 

Digital remains the primary driver of growth with a projected 9.9 per cent increase in 2018, taking the total ad market to $A16.2 billion this year, rising to $18.8 billion in 2022.

However, it was bad news for print, both magazines and newspapers, with ad spends expected to fall by as much as 26 per cent for the magazine category alone.

Digital media attracts high proportions of total budgets, hitting 57 per cent in 2018. Because of this commanding share, digital growth is modest compared to the global average.

The usual channels – video and social – are still the digital growth drivers, with 23.5per cent and 16.2 per cent growth expected in 2018 respectively. 

Mobile advertising already represents the majority of digital advertising spend in Australia (54 per cent), and that will increase to 72 pr cent by 2022 as mobile continues to outperform desktop spending.

MAGNA Australia managing director Victor Corones, said, “There are clearly some high-performing sectors in terms of forthcoming investment, including travel and accommodation, finance, communications, insurance, food and some very minor growth in retail.

“There are also some sectors remaining under pressure such as automotive, real estate, and entertainment and leisure,” Corones said. 

More broadly, the TV market continues to evolve rapidly. CBS took over Network Ten at the end of 2017, and their full line-up of content is migrating to Network Ten stations. Ten also has a video streaming service in the works aimed at rivalling Netflix. Streaming continues to grow with 10 per cent growth in TV screen use outside of typical live broadcast and catch up television. More than 50 per cent of homes have an SVOD subscription.

The reach of television in Australia has only declined slightly, and not nearly as precipitously as it has in other nearby developed markets like New Zealand and Singapore. However viewers continue to reduce their viewing minutes. 

Other traditional formats continue to struggle in Australia, with newspaper ad-sales expected to decline by 20 per cent this year, and magazines expected to decrease even more (down 26 per cent). Print now represents just 7.5 per cent of total budgets. 

Out of Home in Australia is resilient and will increase by nearly seven per cent this year. Digital OOH is the growth engine within the OOH formats and will increase by 21 per cent this year to reach $477 million. The conversion of traditional OOH sites to digital technology continues to fuel digital OOH’s growth.

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Ad spends ipg MAGNA

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