Growth slows for online ad spend, but one format is booming: IAB Australia
Growth in online advertising spending has slowed significantly in the Australian market, from a 22% year-on-year increase in the 2022 financial year to just 1.8% in FY23. However, podcast advertising boomed in the June quarter.
According to IAB Australia and PwC’s latest online advertising expenditure report, challenging economic conditions contributed to the slowdown in overall online ad spend, along with a strong comparative period, which included last year’s federal election and the Summer and Winter Olympics.
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The overall online advertising market hit $14.2 billion in the 2023 financial year, with search and directories taking the bulk of the share ($6.2 billion).
For the quarter ending 30 June 2023, the total online advertising market represented $3.65 billion. While video and audio formats within the general display category experienced double-digit growth compared to the previous corresponding period (12% and 14% respectively), podcast advertising went up by 24%, outperforming other formats.
Gai Le Roy, CEO of IAB Australia said despite the overall growth being modest, the spending is a solid result for the digital advertising industry in a tough economic climate.
“Both digital video and audio options are attracting a larger share of marketing budgets, and the search sector continues its steady growth. It is pleasing to see spend by automotive and travel brands pick up over the last few quarters,” she said.
Moreover in full-year results, video advertising was up 8.9% on FY2022 ($3.5 billion) and continued to outperform the broader general display advertising market with its growth offsetting declines in other formats of general display.
The audio category totalled $236 million and represented 4.3% of the general display advertising market. IAB said no comparative trend data is available for audio as reporting started in the 2022 calendar year.
Connected TV collected the greatest share of content publishers’ video inventory investment, regaining ground compared to FY22 and taking share from mobile.
Entertainment replaces technology in the top five industry categories for FY2023, whilst automotive general display advertising continues to recover after two years of economic concerns and production disruptions.
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Darcy Song was a reporter at Mumbrella, covering media owners, adtech and social platforms. She left in October 2023.
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