Ad spend growth in Australia set to lag behind global average, Dentsu study claims

Dentsu AegisAdvertising spend in Australia is expected to rise one per cent this year and a further 1.5 per cent in 2016, higher than previously forecast but still well behind most global markets, according to a study by Dentsu Aegis Network.

The predicted growth follows a strong end to 2014 where rising consumer confidence due to low interest rates helping ad spend rise 0.3 per cent, the study said.

The increase was marginally above earlier estimated growth of 0.1 per cent. Predictably, digital advertising will drive the growth this year and next with anticipated increases of 13.4 per cent in 2015 but slowing to 11.2 per cent in 2016.

Digital will account for almost 39 per cent of total media spend in Australia this year, according to the figures which were compiled by Dentsu using data from its local markets.

But the local growth is way behind other markets with ad spend in the US predicted to rise 4.6 per cent in 2015 and 4.7 per cent in 2016. The UK is likely to fare even better, Dentsu said, with marketers spending 6.4 per cent more this year and 5.8 per cent next.

dentsu ad trends 2015

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In 2014, the US and UK saw increases of 4.5 per cent and 6.8 per cent respectively, down from earlier estimates of 4.9 and 7.5 per cent.

Globally, advertisers are set to spend US$540 billion on advertising in 2o15, a 4.6 per cent rise on last year, with five per cent growth predicted in 2016.

Mobile spend is estimated to increase 50 per cent and online video 21.6 per cent.

Dentsu Aegis ANZ chief executive Luke Littlefield said: “It is pleasing to see that 2014 was the second consecutive year of growth in ad spend in Australia, consolidating the growth we saw in 2013 and reflecting the cautious but positive consumer and business sentiment in our market.

“Digital is the world we live in and the economy – within our overall growth forecast of 1 per cent for 2015, we are forecasting strong double growth in digital and a total share of ad spend of around 40 per cent.

“The next generation of business will be completely within the digital economy, posing disruption to established businesses and reflecting the fact that from a communications perspective the battleground between traditional and peer-to-peer businesses will be in the convergent media space.

“As a business, we have a strong focus on providing clients innovative solutions across all platforms, however we will see mobile, video, content and wearable technology further and further embedded into consumers’ lives.”


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