Australia’s internet advertising market has hit a record $19.8 billion, with the latest growth being fuelled not just by established advertisers, but increasingly by SMEs, retailers and overseas businesses targeting Australian audiences.
According to the latest IAB Australia Internet Advertising Revenue Report (IARR), internet advertising spend climbed 14 per cent year on year in FY26 – outpacing the market’s six-year average growth of 13.7 per cent and marking its strongest financial-year growth since FY22.
IAB Australia CEO Gai Le Roy said the figures pointed to a broadening of the digital advertising market, with new money coming from advertisers outside the traditional pool.
“Search, video and social all continued to grow strongly in FY26. A lot of the new spend is coming from outside the usual base,” Le Roy said.
“While many established advertisers are working with budgets that aren’t growing, we’re seeing new and increased investment from small and medium businesses, from retailers, and from overseas advertisers targeting Australian audiences.”
Le Roy said much of this activity was also becoming “always-on”, rather than being concentrated around traditional campaign periods.
“Much of that activity is always-on rather than tied to traditional campaign cycles, which shows digital becoming a more consistent, everyday part of how brands reach Australians, not just something switched on for key retail or seasonal moments,” she said.
Search still on the top, but video closes in
Search remained the largest component of Australia’s digital advertising market, accounting for 43 per cent of total spend.
The category grew 13.2 per cent year on year to $8.6 billion, setting a new financial-year record.
But video continued to be the market’s standout growth engine, with spend rising 18.8 per cent to $5.9 billion.
Video now accounts for 30 per cent of total internet advertising spend, bringing it within striking distance of one-third of the market.
Social video was particularly strong, climbing 29.5 per cent to $2.4 billion and accounting for 41 per cent of all video advertising spend, up from 38 per cent in FY25.
Within publisher video inventory, Connected TV also continued to gain ground, representing 60 per cent of publisher video expenditure in FY26, up from 51 per cent a year earlier.
Desktop’s share fell from 37 per cent to 25 per cent, while mobile edged up from 12 per cent to 15 per cent.
The growth however, was not confined to search and video.
Classified advertising recorded double-digit financial-year growth for the first time since FY22, rising 12.6 per cent to $3.1 billion.
Non-video general display grew 6.9 per cent to $2.2 billion, with infeed and native advertising the strongest contributor, increasing 10.9 per cent.
Audio advertising grew 6.6 per cent to $353 million, driven by podcasting, which increased 10.1 per cent and now represents 40 per cent of total audio spend.
Streaming audio also grew 4.3 per cent.
Across general display expenditure reported by content media owners, Retail, Automotive, Entertainment & Media, Finance and FMCG remained the five largest industry categories, collectively accounting for 56 per cent of spend.
Retail increased its share to 17.8 per cent from 17.2 per cent, while Automotive rose to 14.2 per cent from 13.7 per cent.
FMCG slipped from 6.4 per cent to 6.1 per cent.
The momentum strengthened in the final quarter of FY26, with internet advertising spend reaching $5.4 billion in the June quarter – up 16.3 per cent on the same quarter last year.
Search increased 13.4 per cent to $2.335 billion, while video jumped 22.6 per cent to $1.677 billion, classifieds rose 16.8 per cent to $789 million, display excluding video increased 10.7 per cent to $580 million and audio grew 9.3 per cent to $94 million, and social video grew 28.3 per cent year on year during the quarter, maintaining its 41 per cent share of total video spend.
Podcast advertising also hit a new quarterly record of $40 million, up 13.1 per cent year on year and 22.6 per cent from the March quarter.
Government entered the top five industry categories for the first time in the June quarter, accounting for 6.3 per cent of spend, up from 5.3 per cent a year earlier.
It displaced FMCG/Health & Beauty from the previous year’s top five.
