Online advertising to grow 5.5% to $12.4bn by 2025, says PwC

Internet advertising is entering a “period of disruption” according to PwC’s latest Australian Entertainment and Media Outlook, as consumer-facing players, such as Google’s Chrome and Apple prepare to change how they will allow consumer data to be collected and used, with a shift towards a more privacy-centric approach.

Though Google has since delayed the implementation of its signalled change to disallowing cookies within its browser until 2023, these developments will take effect over the forecast period, and shift far more of the power over control of data into the hands of the consumer.

Internet advertising recorded growth of 3.3% in 2020 reaching $9.3 billion, and is expected to grow at 5.5% over the forecast period to 2025, based on the midpoint scenario, wrote PwC. Advertisers using online channels will “grapple with these changes” to tracking, segmentation, and targeting of audiences leading to a forecast decline in banner-type display advertising over the forecast period.

“We see five major power shifts that are impacting the entertainment and media landscape to varying degrees. The overarching shift is undoubtedly sustained digital disruption,” said PwC Australia partner and Australian Entertainment and Media Outlook editor, Justin Papps.

“Even with these shifts, the stability or resilience of the market overall should not be underestimated. The contraction of 2020 is giving way to a solid rebound this year, and a return to 2019 revenue levels within the next few years for most parts of the industry, if not sooner.”

Source: Australian Entertainment and Media Outlook  [Click to enlarge]

Furthermore, the ability for a consumer to scroll past, skip or opt-out of an advertising message, coupled with the fact that large segments of the population are spending less time on advertising-supported services means that “creativity in execution and sound channel planning” has never been more critical for brands seeking to attract and retain new customers, stated the report.

The internet advertising industry experienced a “year of four quarters” in 2020. As much of Australia’s retail sector rapidly pivoted to e-commerce during third quarter 2020, internet advertising saw an early resurgence due to its perceived ability to deliver short-term value to advertisers. Quarter four was stronger than forecast with a combination of delayed marketing investment and increased consumer confidence driving growth in all sub-segments.

The COVID-19 period has seen mobile operators continue 5G rollouts. Ongoing network improvements are set to have a resultant upswing in data consumption, and fuel further volume growth in 2021. The total Australian internet access market was worth $30.1 billion in 2020, a year-on-year growth of 1.14%.


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