Australian digital ad spend booms while linear TV staggers into 2023: Magna forecast

Digital advertising continues to be a powerhouse of the Australian advertising market in 2022. As the category spend grew by 9% to reach $12.1 billion (A$16.2 billion), it represented 72% of Australia’s total ad spending, a Magna report found.

This category growth is led by mobile advertising spending, which will increase by 12% to $8.4 billion (A$11.2 billion). By format, search increased by 12%, video by 12%, and social media by 7%.

The Mediabrands’ media intelligence and investment division released its global advertising forecast today. Linear grew by 3% this year to reach 4.6 billion (A$6.2 billion), a significant drop from 2021’s 14% growth, as the format tries to restore itself to pre-COVID ad volume. However, the report suggests linear is likely to keep eroding and will struggle to reach the pre-COVID highs in Australia.

Linear TV will shrink by 2% in 2022, despite a relatively strong first half of the year buoyed by the Federal Election and political party spend, and the return of travel and entertainment categories. Erosion is expected to continue in 2023, forecast down 7%, as viewing continues to shift to digital formats.

Other linear formats expanded this year (radio increased by 10% to A$687 million, OOH by 23% to A$1.1 billion), but print will continue its decline (-3% to A$423 million).

OOH has witnessed particularly strong growth globally, as Magna predicts it to complete a full global recovery in 2023, growing by 6% to $33.5 billion (A$49 billion).

Overall, the report found that Australia’s advertising market grew by 8% this year to $16.8 billion (A$22.3 billion) and will have an additional 5% growth in 2023, to $17.7 billion (A$23.5 billion). This outperformed the APAC growth of 5.2%.

The growth figure comes after an economic rebound in 2021, as mobility returned to the normal level, and inflation increased by 6.5% in 2022 and will increase by 4.8% in 2023.

Lucy Formosa-Morgan, CEO of Magna Australia said: “2022 was a strong year for ad growth in Australia as a whole. With so many global and local pressures (Russia’s invasion of Ukraine, China’s COVID zero tolerance stance impacting manufacturing, inflation, seven interest rate rises, etc.) impacting consumers, we do envisage that consumer spending will start to reduce in the new year and as such we are forecasting that total ad spend for 2023 will be low single digit growth with only a handful of channels showing growth.”


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