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Online Ad Growth In Australia Reaches Five-Year High

Online ad spend in Australia – already larger than any traditional media in the country – surged forward by another 30% over FY2016, to total A$6.8 billion (US$5.2 billion) in net spend.

That figure, announced by Australia’s Internet Advertising Bureau (IAB), is the fastest rate of online ad growth the country has seen in five years, underscoring the dramatic shifts taking place in the market.

Mobile ad spend in particular expanded by 72% over the year to reach A$1.9 billion (US$1.5 billion), while desktop video advertising grew by 55% to reach A$0.6 billion (US$0.5 billion).

IAB Australia is planning to put a number on mobile video advertising – currently counted as part of mobile, but not broken out – for next year’s report.

Desktop video advertising, meanwhile, is powered by three industries: FMCG, automotive and retail. Collectively, they made up almost half of the desktop video ad market in the June quarter, the end of Australia’s financial year.

FCMG is the country’s single biggest buyer of video advertising, accounting for a quarter of desktop video spend in the three months ending June 2016.

However, FMCG advertisers are not Australia’s biggest buyers of online advertising overall, spending less than the automotive, real estate, retail, entertainment & leisure and finance categories.

Press release in full below:


Online Advertising Spend Reaches Record $6.8 Billion In 2016 Financial Year

  • Fastest year-on-year growth in online advertising in five years
  • Mobile advertising driving growth; accounts for $1.96 billion of total market
  • Real Estate fastest growing industry category

SYDNEY, 23 August 2016: The Australian online advertising market has again delivered robust double-digit growth increasing $1.6 billion to reach $6.8 billion for the full financial year ending June 30th 2016, a 29.7 percent increase over the prior financial year. This represents the fastest year-on-year growth in online advertising over the last five years.

The data from the latest IAB/PWC Online Advertising Expenditure Report reveals that double digit growth was achieved by all online advertising segments during the financial year. General Display posted the largest increase at 43.3 percent – the highest year-on-year growth since the inception of the report – comprising $2.5 billion of the $6.8 billion market. Classifieds experienced a 21 percent year-on-year growth to reach $1.2 billion, and Search and Directories grew 24 percent to make up $3.1 billion of the market.

“Another year of double-digit growth, driven by the continued rise of the mobile and video category, means that online advertising heads closer to half of all advertising spend,” said Vijay Solanki, CEO of IAB Australia. “It’s brilliant to see Real Estate along with the Automotive, Retail and FMCG categories lead the way. They have built capability across all digital platforms especially in mobile and video. They know how to use content, technology and data to help achieve their marketing goals efficiently.”

Online advertising market segments size and growth for FY 15-16.

Mobile grew to $1.96 billion of the total market, continuing an impressive upward trajectory to grow 72 percent on the previous year. Mobile expenditure was split between Search and Display at 43 percent and 57 percent respectively, with 67 percent of the spend going to smartphones and 33 percent to tablets.

Video advertising (mobile video advertising is included in the mobile display category) grew 55 percent from the prior year’s $388 million to reach $600 million for financial year 2016. It now makes up 24.3 percent of all General Display advertising expenditure, up from 22.5 percent in financial year 2015.

Real Estate advertising saw the largest share in growth year on year, increasing its category share to 13.2 percent, compared to 10.8 percent in the previous year. Motor Vehicles remained relatively stable and accounts for the largest category share at 17 percent for the year, with Retail the third largest category at 10.4 percent, up from a 9.2 percent in the previous year.

Top five industry categories by expenditure share, twelve months ended 30 June 2016.

“The uptick in the Real Estate category is illustrative of an industry that is leading the way in its use of targeted content, personalisation, optimisation in order to lead digital engagement in today’s disruptive environment,” noted Solanki.

Year-on-year total online advertising market value and growth from FY 11-12 to FY 15-16.

Quarterly Highlights

In the three months ended 30 June 2016, total online advertising was $1.8 billion representing a year-on-year growth of 25.6 percent and a 4.9 percent increase from the prior quarter. General Display increased at the fastest pace growing 8.9 percent in the June quarter 2016 compared to the March quarter largely due to the continued strength of mobile and video. Compared to the same quarter in 2015, General Display online advertising expenditure this quarter grew 30.3 percent. Mobile display advertising contributed 47.7 percent of General Display (steady from previous quarter) with Video display contributing 26.8 percent (up 1.5 percent from prior quarter).

Source: IAB Australia