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Internet to take half of Aussie adspend

News, 16 June 2015

SYDNEY: Within five years internet advertising in all its forms will account for 51% of paid marketing expenditure in Australia according to a new report.

The annual Australian Entertainment and Media Outlook report from consulting firm PwC predicts that the advertising market will grow at compound annual growth rate of 4.8% between 2014 and 2019, while the actual value will increase from A$13bn to A$16bn over the same period.

Within that, however, there will be some dramatic shifts, as the share taken by internet advertising is slated to jump from a current figure of 34% to 51%, Mumbrella reported.

At the same time, TV's share will decline from 30% to 24% and the advertising revenues of free-to-air television are forecast to stagnate as viewers shift to IPTV and pay-TV.

Within internet advertising, search will continue to dominate, with its share edging upwards from 50.7% to 52.2% and revenues rising from A$2.4bn to A$3.9bn over the five years.

Display advertising, meanwhile is forecast to increase from A$1.4bn to A$2.2bn, while classifieds will grow from A$929m to A$1.363bn.

By far the fastest growing area of internet advertising will be video, which PwC anticipates will triple in value from A$176m to A$608m.

"When you look at the cycle of disruption for media it is speeding up," said Megan Brownlow, editor of the Outlook.

"There is trouble everywhere… and the advice we are focused on delivering is 'have a go' and try and bring your stakeholders, shareholders and boards with you when you ask for investment dollars."

When she considered what traditional television and radio companies were doing with streaming services, or what agencies were doing with brand-funded content, she noted that "all of these are digitally supported but they represent much more fundamental shifts in business model".

Everyone in the industry needed to understand the scale of these changes and to respond accordingly, she argued.

"Frankly in Australia we have not been as innovative as we need to be," Brownlow said.

Data sourced from Mumbrella; additional content by Warc staff