IPG Study: Aussie Ad Spend Set To Hit $17B In 2019

IPG Study: Aussie Ad Spend Set To Hit $17B In 2019
SHARE
THIS



Australia’s media advertising economy is predicted to grow by 2.5 per cent in 2019, slower than 2018’s 5.3 per cent growth, to reach AU$17 billion.

The new forecast has been issued by IPG Mediabrands’ media intelligence and investment division Magna.

The new data also predicts Australia ad expenditures will increase by 3.4 per cent in 2020 to reach $17.6 billion, as we remain one of the most advanced advertising economies in the world and with the second-highest ratio of ad-spend per capita of AU$723 per year.

Economic confidence has dipped recently as a result of low manufacturing figures, concerns around the pace of trade and any impact of potential international trade wars.

There is also a deflationary residential property market and low wage growth. Real GDP expectations in 2019 are reported at 2.1 per cent, with CPI at 2.2 per cent for nominal GDP of 4.3 per cent .

In 2020, real GDP will accelerate to +2.8 per cent but inflation will decrease, keeping nominal GDP steady.  Should there be any further slow-down we would expect further effect on the advertising market.

Magna says digital advertising now accounts for a massive 60 per cent of brand budgets, the sixth highest share globally.

Concurrently, digital media is so mature in terms of usage and spend that growth rates are starting to plateau.

The digital market however continues to shift to more mobility in device usage with approximately 60 per cent of digital revenues expected across mobile devices. 75 per cent of digital revenues are expected to be through mobile devices by 2023.

 Magna Australia MD Victor Corones (feature image) said: “We expect total digital ad spend to grow by +7.5 per cent in 2019, the first year of single-digit growth since 2001.

“Digital spending growth had already started to slow in the first few months of 2019, as it has in many other mature markets, despite the May Federal election.”

 Digital growth is driven predominantly by video (+16.1 per cent YoY), social (+11.9 per cent ) and search (+6.5 per cent ) with search overall accounting for 45 per cent of all digital ad spend.

Magna’s data says linear television revenue will shrink by -4.7 per cent this year, the sixth consecutive year of decline.

Linear TV audiences in Australia are shrinking by approximately -10 per cent per year, partly due to the rapid rise of Video on Demand.

Whilst we are seeing a decline in linear TV, the accelerating growth in Broadcast Video on Demand Services (BVOD) will deliver a close to flat market for the TV networks.

The linear TV market has also come under pressure from SVOD services.

Netflix has been in the Australian market for four years and has more than 10 million subscribers.

Other SVOD players are also experiencing double digit growth in audience levels, albeit off a relatively small base.

The introduction of Virtual Oz (VOZ*) measurement through Oztam is now expected to be in market in 2020 and this should bolster the Free to Air Networks’ total revenues.

 Australian linear TV has one of the lowest market shares worldwide at less than 20 per cent of total advertising. Despite this lower share TV is clearly still the strongest driver of brand awareness in this market.

In 2019 Magna sees an increase in the number of sporting telecasts on linear television. Many being telecast on the smaller digital networks.

An increased focus on women’s sport is also noticeable across network schedules as is the increase in US-based sports such as the NBA and NFL.

These new events are not yet significantly impacting on overall TV revenues. However sport is seen as a key component to the networks overall strategy to retain live audiences.

The next big sporting event that could significantly move the ad spend needle is the 2020 Summer Olympics in Tokyo.

This year’s federal election had only a mild effect on the advertising market, with Clive Palmer’s reported $60 million campaign the only bump of real significance during the period. 

The election appears to have somewhat masked an underlying weakness in the market. 

Magna’s data also sees print media, as with most mature advertising markets, coming under continued pressure.

Newspaper advertising spend will decrease by -13.5 per cent this year and magazine performance will be at -17 per cent .

Terrestial radio is stable at +1 per cent growth year-on-year.

Out-of-Home will grow +4.9 per cent this year, weaker than last year’s +9.4 per cent performance, but still robust compared to the rest of offline media formats.

Digital OOH will grow the fastest, but not to the degree that it has in past years due to a slowdown in conversions of classic format OOH sites to digital.

Please login with linkedin to comment

IPG Mediabrands MAGNA

Latest News

72andSunny Unveils First Campaign For Plant-Based Drink Brand Australia’s Own
  • Advertising
  • Campaigns

72andSunny Unveils First Campaign For Plant-Based Drink Brand Australia’s Own

Freedom Foods and 72andSunny Sydney have launched the first advertising campaign for Australia’s Own range of plant-based beverages. The campaign introduces a new visual world and identity for the brand and captures the healthy, positive feeling you get when spending time in nature and when consuming Australia’s Own certified-organic, plant-based beverages. As well as featuring […]

Are You Paying Too Much In Search Marketing?
  • Partner Content

Are You Paying Too Much In Search Marketing?

Are you paying too much for search marketing? Discover the awful truth here. Or, alternatively, look at the invoice.

Partner Content

by B&T Magazine

B&T Magazine
Nine APAC Finalists In One Club’s Young Guns 19 Competition
  • Advertising

Nine APAC Finalists In One Club’s Young Guns 19 Competition

Nine creatives from APAC are among the 94 finalists from 27 countries in The One Club for Creativity’s prestigious Young Guns 19 competition, celebrating international creative professionals age 30 or younger. The finalists from APAC are: Hiu Ching Kung, graphic designer, Hong Kong Lam Ieong Kun, graphic designer, illustrator, indego design, Macau Raxenne Maniquiz, graphic designer, illustrator, Santa Maria (Philippines) Kiyotaka […]

Adflow’s Regional OOH Coverage Expands By 60%
  • Media

Adflow’s Regional OOH Coverage Expands By 60%

OOH transit company Adflow has announced the success of the first phase of its regional expansion program. Adflow’s regional footprint has increased by 60 per cent to now include 65 regional locations. With 9.1 million people living regionally in Australia (growth of 1.1 per cent experienced in the 19/20 Financial year) and most regional centres […]

Freshworks Starts Trading On Nasdaq, Valued at $13.7 Billion
  • Technology

Freshworks Starts Trading On Nasdaq, Valued at $13.7 Billion

Freshworks, a leading software company, has started trading on the Nasdaq Global Select Market, marking an important milestone for the company. The company priced its IPO at US$36 per share (AU$49.76), raising about US$1 billion (AU$1.4B), resulting in a total market capitalisation of AU$13.7 billion  (US$10B). Freshworks, which was founded in India, has strong roots […]

SLIK Announces Four New Key Hires
  • Marketing
  • Media

SLIK Announces Four New Key Hires

Independent creative agency, SLIK, has made significant changes to its full service creative offering with four hires across management, creative and production.

How Retailers Can Maximise Their Results This Sales Season
  • Marketing
  • Technology

How Retailers Can Maximise Their Results This Sales Season

Black Friday Cyber Monday (BFCM) is the biggest player in the holiday shopping game and Google’s most recent research suggests consumer interest for the peak sales season starts much earlier than retailers may realise. The pandemic has fundamentally changed buyer behaviour over peak sales season, with Google suggesting that global consumer interest in Black Friday […]