Australian online ad spend grows to $6.8 billion

Arvind Hickman
By Arvind Hickman | 23 August 2016

The rapid rise of advertising on smartphones and tablets has powered the fastest growth of Australia’s online advertising market for five years, the latest IAB/PwC Online Advertising Expenditure Report has found. Online ad spend grew by 29.7% to $6.8 billion in the year to 30 June 2016.

General display advertising posted the largest increase up 43.3% to $2.5 billion, which was its highest year-on-year growth since the inception of the report 13 years ago.

This was driven by strong spending on video advertising (desktop and mobile), which grew by 55% to $600 million and now makes up nearly a quarter of all online display.

“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,” IAB Australia chief executive Vijay Solanki says.

At current growth trajectories, display advertising should take over from search as the largest area of spend in the second half of 2017.

The other areas of online advertising also posted strong growth. Search and directories grew 24% to account for $3.1 billion of the market, the largest share, and classifieds experienced 21% year-on-year growth to reach $1.2 billion.

PwC online ad spend chart 2016

Real estate on the rise

The industry sector that had the largest increase in online ad spend was real estate, which increased its category share to 13.2% from 10.8% the previous year. 

The automotive sector is still the largest online advertiser, with stable ad spend, and accounts 17% of the total, while retail is the third largest category at 10.4%, a 1.2 percentage point lift on its share last year.

PwC online ad spend chart 2016 2

Solanki says it is not surprising to see these categories, alongside FMCG, leading the way.

“They have built capability across all digital platforms especially in mobile and video,” Solanki says, adding that real estate has benefitted by using targeted content, personalisation and optimisation to engage audiences online.

“They know how to use content, technology and data to help achieve their marketing goals efficiently."

PwC online ad spend chart 2016 3

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