Ad growth is improving, out-of-home advertising is tipped for success and clumsy mobile banners need to be left in the past - the latest PwC Australian Entertainment and Media Outlook Report is out.
The total Australian advertising market is expected to grow to $16.4 billion by 2019, up from $12.9 billion in 2014 – according to the latest PwC Australian Entertainment and Media Outlook Report
The 2014-2019 report highlights the growth and challenges that lie ahead for sectors in the media.
The report, which said the Australian advertising market saw growth of 2.4% in 2014, compared to 6.4% in 2013, predicts that the Australian advertising industry will see see an average growth of 4.8% over the next five years, reaching and estimated 16.4 billion.
The advertising growth rate for 2015 is projected to rise 3.2%.
Including consumer spending, the entertainment and media industry will be worth $43.4bn in 2019, and will average 4.2% growth a year.
Internet advertising is projected to grow 13%, to reach $8.2 billion by 2019. Free-to-air TV is expected to hit $3.8bn, $1.5bn for newspapers and $1.3bn for radio.
The free-to-air television ad market is predicted to stagnate over the next three years and as witnessed with the emergence of more SVOD platforms, networks are now looking for new revenue streams and ways to capture the increasingly fragmenting audiences.
Other report highlights said that marketers will need to expand their focus well beyond driving consideration and decisioning; movement will be the new data point; that sports rights will remain big business in free-to-air TV; the launch of Apple's Watch will open up the market “significantly”; search will continue to be the dominant internet advertising rising from $2.4bn now, to $3.9bn by 2019; display advertising is forecast to increase from $1.4bn to $2.2bn and that classifieds will grow from $929m to $1.363bn.
It also found out-of-home advertising to be one of the “success stories” of 2014, with many other sectors in decline.
In mobile, advertising needs to get more sophisticated the report notes: “There is little room for clumsy banners, interstitials and page takeovers that add seconds for time-poor users.”
Speaking to AdNews, editor of the PwC report, Megan Brownlow, said while Australia has been challenged by media duopolies and strict regulations, it has honed skills in content. She also said we are going to see reward for those media companies who bite the bullet and invest and start being brave about various parts of their business and even make some interesting acquisitions.
“It's going to fertile for them - TV, radio and even the digital arms of those businesses,” she said.
On the agency side, she said the larger ones are all part of global holding companies, so they benefit from the tech investment there. She added that Australia is a strong media space, but has been challenged historically as it's been protected – with regulations and polices that many have complained about.
Brownlow argued that has meant they haven't owned their innovation skills, except in content innovation, because they lived and died by that, it’s an area they've excelled at.
“Innovation that's going to be really important for media companies is going to be service innovation and relationship innovation, business model innovation and distribution innovation,” she said.
“In service innovation - the classic example for media companies is really automation - because the idea of service innovation is to take the friction out of your relationships with your customer. So in the B2B media space, you take the friction out of your relationships with your media agency, but then other forms of service innovation that I’ve seen media companies around the world do is to create self-service platforms for small to medium size businesses and they allow them to book their ads and also create their ads. Radio networks are doing that,” she said.
“Innovation is about content and data and location, so that’s improving the relationship so you send the most targeted messages possible, so targeted that you come across as being helpful.”
The report breaks down the Australian advertising market by media and features insight from investors and “leaders of innovation”.
In another story on the PwC report, we hear how big companies Down Under haven't got the appetite to “cannibalise themselves” and Australia lacks a “competitive cauldron” to commercialise innovation. See here for more.
Keep an eye on AdNews for more on the report.
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