Digital advertising growth has hit a wall in Australia

By Chris Pash | 24 June 2019

Digital advertising spend growth is about to drop to single figures for the first time since 2001, according to IPG Mediabrands’ media intelligence and investment division Magna.

Magna expects total digital to grow by 7.5% in 2019 to $10.2 billion, the first year of single-digit growth since 2001.

The new data predicts Australia's overall ad spend will rise 2.5% in 2019 -- slower than the 5.3% performance in 2018 -- to reach $17 billion, and increase 3.4% in 2020 to $17.6 billion.

“Digital spending growth had already started to slow in the first few months of 2019, as it has in many other mature markets, despite the May Federal election," says Magna Australia managing director Victor Corones. 

Magna says digital media is so mature in terms of usage and spend that growth rates are starting to plateau.

The Magna forecasts follow a softening of online advertising in the first quarter of 2019, according to numbers from IAB which showed a fall of 4.3% against the December quarter. However, spending was still up 4.9% to $2.2 billion compared to the same three months last year.

The IAB Australia Online Advertising Expenditure Report (OAER) published by PwC showed video advertising up 15%, mobile 26% and classified advertising 7% with growth across recruitment, real estate and automotive.

Magna says digital advertising now accounts for 60% of brand budgets in Australia, the sixth highest share globally.

However, the digital market continues to shift to more mobility in device usage with about 60% of digital revenues expected across mobile devices. This is expected to rise to 75% by 2023.

Digital growth is driven mainly by video (16.1%), social (up 11.9%) and search (6.5%). Search accounts for 45% of all digital ad spend.

Magna says the federal election had only a mild effect on the advertising market, with Clive Palmer’s reported $60 million campaign the only bump of real significance during the period. The election appears to have somewhat masked an underlying weakness in the market.


Magna’s data says linear television revenue will shrink by 4.7% this year, the sixth consecutive year of decline.

Linear TV audiences in Australia are shrinking by about 10% per year, partly due to the rapid rise of Video on Demand.

However, Magna says accelerating growth in Broadcast Video on Demand Services (BVOD) will deliver a close to flat market for the TV networks.

The linear TV market is also under pressure from SVOD services. Netflix has been in the Australian market for four years and has more than 10 million subscribers. Other players are also experiencing double digit growth. 


Magna’s also sees print media under continued pressure.

Newspaper advertising spend is forecast to fall by 13.5% this year and magazine performance will be down 17%.

Radio is stable at 1% growth.

Out-of-Home will grow 4.9% this year, weaker than last year’s 9.4%, but still robust compared to the rest of offline media.

Digital OOH will grow the fastest, but not to the degree that it has in past years due to a slowdown in conversions of classic format OOH sites to digital.

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