Political spend dominates Q1 2022 digital advertising as industry grows 19.2% year on year

The local Australian online advertising market has continued to grow, reaching $3.449bn for the quarter ending 31st March 2022 – an increase of 19.2% on the same period in 2021 according to data from the IAB Australia Online Advertising Expenditure Report (OAER) prepared by PwC.

Within the quarter, the most significant shift in spending was unsurprisingly around the Federal election, resulting in Government being elevated to the number one advertiser category, representing 13.5% share of the general display market for the quarter, up from 3.9% in Q1 2021.  By contrast, retail experienced the largest decrease in share, dropping from 16.4% to 13.5% share of general display advertising.

Political and government ad spend over the years

In the last few years, Government ad spend increased 49% (as a result of COVID messaging, vaccinations and broader health communications) vs total market up 18%.

Political parties, unions and associations still had consistent ad expenditures, which were significantly bolstered in 2019, thanks to the Federal election. In an election year, spend typically grows by approximately 90%, adding an additional $80M+ into the industry.

According to data and market measurement firm Nielsen, the 2019 election saw a record $81.8 million spent from September until the fateful day of May 18.

This year, the United Australia Party alone reportedly had an estimated spend of $100 million in the lead up to federal election 2022.

Nielsen Ad Intel shows the party spent $23,933,413 across just one month 10 April to 14 May, in figures that don’t include OOH and search.

Following the UAP’s enormous $80 million ad spend in 2019, its campaigns and placement were said to be under increased scrutiny this election, according to several industry sources.

In August 2021, Nine told Mumbrella it had rejected advertisements from Palmer’s political party, that it considered to contravene government issued-health advice on vaccines.

Across the first three weeks of the election period, the UAP invested a total of $9,537,873, representing 81% of the total advertising spend during this period.

The Australian Labor Party outdid Liberal in spend figures this year, shelling out $3,164,000 across digital channels. In the first week of the election cycle alone, the ALP invested $1,282,770 in political advertising.

The Liberal Party had a more modest expenditure, minimising their overall digital presence with a spend of $1,352,000 across digital channels since the election was called on 10 April.

In the final week of the election period, all digital platforms are generally expected to see investment ramped up as broadcast channels hit advertising blackout periods at the end of the Wednesday before polling day.

This forecast rang true in 2022’s election, with figures provided to Mumbrella by Pathmatics showing that as the final polling day neared, Labor aggressively upped its digital spend, spending $1,084,000 across the last week of the campaign, compared to the Liberal Party’s $325,000, and the UAP’s $1,393,000.

These figures illustrate a seismic shift in the political ad spend market in the last few years alone. The shift can confidently be attributed in part to Palmer’s bullish and relentless spend figures, which only appear to compound each cycle.

In contrast to this year’s eye-watering ad spend sums, Palmer only expended $100,000 in the 2016 election, a campaign that saw the Libs spend $8.7m and Labor $6.3m – this year alone, in the week commencing 11 April and ending 16 April, the total spend for all political parties across all channels excluding OOH was $4,591,119. This means approximately a third of 2016’s total ad spend was represented in a single week of expenditure this April, an unambiguous sign of Palmer’s very tangible influence on the broader industry at large.

In just three years, election ad spends jumped from $15.9 to $81.8 million – an increase of more than 500%.

Spend by modes of advertising in Q1 2022

All general display categories recorded growth on the previous year, with video advertising increasing 24% to reach $715.1m for the quarter, infeed/native by 5% to reach $349.80m, standard display by 11% to reach $167.7m and other advertising by 69% to reach $21.5m.

A minimum of 60% of all election spending this was expected across broadcast free-to-air television, with multiple commercials in premium high engagement properties seen across primetime timeslots.

Spending on classifieds and search & directories grew quarter on quarter, increasing 4.3% and 3.6% respectively while general display advertising seasonally contracted by 15.1% as it does each year.  Interestingly, search & directory spend in the quarter seized share from general display advertising as the recovery of travel accelerates.

Gai Le Roy, CEO of IAB Australia said: “The digital ad market saw solid investment growth for the March quarter compared to the previous year with the standard slight seasonal decline from the December quarter. The make-up of the top advertiser categories was greatly disrupted by significant ad spend from the political parties and independents early into the campaign for the Federal Election.”

The share of content publishers inventory bought programmatically grew by 1% on the immediate prior quarter bringing it to 42% of spend, equal to the percentage of agencies buying by IO, while direct bookings remained relatively stable at 16%.


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