IAB Study: Online Advertising Growth Slows In “Challenging” Market

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A “universally challenging” advertising landscape has slowed online advertising growth in Australia.

The Interactive Advertising Bureau (IAB) has released its Online Advertising Expenditure Report, prepared by PwC, for the 2019 financial year.

The report found total spend for the year reached $9.0bn, representing a 7.1 per cent year-on-year increase.

This was down from 11 per cent growth the previous financial year.

According to IAB CEO Gai Le Roy, the Australian downturn is indicative of global challenges for online advertising, but could still present opportunities.

“We are seeing steady digital growth within a universally challenging advertising environment,” she said.

“It is proven that a slower advertising market offers the brave marketer an opportunity to invest in order to take market share so it will be interesting to see how vertical category investment unfolds over the medium term.”

PwC Australia chief economist Jeremy Thorpe added: “Australian businesses are operating in a challenging low growth environment. Investment in marketing is an essential tool for businesses to grow their available market to achieve growth.”

Video and Mobile draw investment

The report also shows shifting consumer behaviours have influenced where advertisers are spending.

The total mobile advertising market increased by $1bn to reach $4.6bn in total, marking a 28.4 per cent year-on-year increase.

IAB tipped the introduction of 5G to further increase investment in this space.

Video remains the fastest growing format of the $3.4 bn display market and accounts for 44 per cent of total display (see graphic below).

Total video advertising now stands at $1.5 bn (up from $1.3 bn in 2018) assisted by the growth of connected TV inventory and revenue.

 

pwc online advertising

Search and Directories also showed strong growth, increasing 8.0 per cent in the twelve months ended 30 June 2019, whilst growth for General Display and Classifieds stood at 7.4 per cent and 4.2 per cent annual growth respectively.

 

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