Australia seeing digital advertising growth boom, especially mobile

mobile ad spend soars

Australian digital advertising spend is expected to grow at a pace three-times faster than the overall media ad spend in 2019. The growing use of video advertising will be a big driver, according to a new report. The overall market is forecast to top AU$17 billion. Brands say they’ll spend 60% of their budgets on digital this year.

The report, from Media intelligence and investment firm Magna, notes that he digital advertising share is the sixth-highest share globally. Nevertheless, digital growth has slowed, with 2019 being the first year that the digital advertising segment is expected to see single-digit growth since 2001. The slowing advertising growth is a product, Magna said, of a maturing market.

Video growth is forecast to increase 16.1% year/year in 2019, with social up 11.9% and search – which accounts for 45% of all digital ad spend, increasing 6.5%.

OTT & mobile impact on advertising spend

Just where digital is being spent also is changing, with brands leaning more toward mobile. Magna expects, for example, 60% of digital spend to be on mobile devices this year with 75% forecast for 2023. We found in our latest Global Video Index, for instance, that mobile video starts exceeded 60% in 2018 for the first time.

The rapid increase of OTT consumption also is impacting digital advertising spend, as Australian linear TV audiences continue to erode at a rate of 10% per year.

Magna said 2019 will see revenue for linear TV decline 4.7% this year. It’s the sixth-straight year linear has seen advertising spend drop.

The next big sporting event that could significantly move the adspend needle is the 2020 Summer Olympics in Tokyo.

Other notes from Magna:

  • Total ad spend will increase 3.4% to $17.6 billion in 2020;
  • Sporting telecasts on linear TV will jump in 2019, especially on smaller digital networks. Women’s sport, and US-based sports like the NBA and NFL will proliferate;
  • Newspaper ad spend continues to spiral, forecast to decline -13.5% this year, with magazine performance tumbling 17%; and,
  • Terrestial radio is expected to grow 1% y/y.

The bottom line

That linear TV advertising is shrinking should come as no surprise, as brands look to reach younger, more digital centric viewers.

In addition to VOD OTT services, subscription plays like Netflix, which now has more than 10 million subscribers in Australia since launching there four years ago, continue to draw more viewers looking for greater flexibility in delivery and content.

Mobility is the hottest ticket in the market and, with 5G becoming more of a reality than a next-gen technology buzzword, mobile digital ad spend will likely grow faster, and more relentlessly, than any other form of advertising.

Sports, obviously, remain one of the last-stand hopes for linear TV… a stand that will be weakened as 5G greatly reduces latency for live delivery to connected devices.

With the 2020 Summer Olympics in Tokyo just a blink away, look for digital advertising initiatives, especially those targeting mobile devices, to accelerate dramatically.

Stay tuned.

Jim O’Neill is Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn