Online advertising market reports $9.1bn in spend for FY20 as Q2 declines 12%

Total online advertising continued to slow in the second quarter of 2020, falling 12% year on year, but the full financial year total held steady at $9.1bn.

Video was the outlying category for the quarter, outperforming the others with a no change in year on year expenditure and an increase in general share to 53%.

The IAB Australia Online Advertising Expenditure Report (OAER), compiled by PwC, shows the impact of COVID-19 on the digital advertising market, following 5.6% of growth in Q1.

IAB CEO Gai Le Roy said the numbers aren’t surprising given the current strain on the industry.

“The headline number is not a surprise as we anticipated a tough quarter for the industry. Within this, however, video is proving to be extremely resilient and holding steady year on year. We are also seeing retail, government and technology experience the largest increase in share compared to the previous quarter.”

All online advertising categories showed declines compared to quarter ending June 2019 with search and directories down 9%, general display 11% and classifieds recording the steepest decline at 22.7%.

The shift to programmatic advertising reached a new peak according to the report with 44% od all advertising on content sites bought programmatically, compared to 41% from agencies using insertion orders.

The percentage of inventory bought directly from advertisers decreased to 15%. 65%, the bulk of content publisher’s video inventory, was bought programmatically in the June quarter, up nine percentage points from the previous quarter.

The top five industries were impacted by the decline in spend, with real estate and entertainment falling from the top five, while media and technology moved in alongside retail, automotive and finance. The retail sector experienced the largest increase in share quarter on quarter, while the travel sector experienced the largest decline.

IAB Australia Online Advertising Expenditure Report FY2020 [click to enlarge]

While the financial year spend remained steady at $9.1bn, spend slowed for all advertising types, with classifieds recording the biggest decline of 3.9% to $1.6bn.

Video is the biggest growth category, continuing to achieve double-digit growth, up 15.4% to $1.7bn.

IAB Australia Online Advertising Expenditure Report FY2020 categories [click to enlarge]

The top five industry categories for the financial year were automotive, retail, finance, travel and real estate. Retail and technology experienced the largest increase in share (up 1.3 percentage points), whilst automotive experienced the largest decline in share (down 5.7 percentage points).


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