The Australian internet advertising market has delivered its strongest March quarter on record, with total spend reaching $4.9 billion in Q1 2026.
The latest IAB Australia Internet Advertising Revenue Report, prepared by PwC Australia, found that total internet advertising expenditure rose 15.3 per cent year-on-year, up from $4.22 billion in Q1 2025.
The result was within one per cent of the record December 2025 quarter, suggesting the usual seasonal slowdown in the first quarter has narrowed significantly.
Video and search lead growth
Video advertising was the fastest-growing major segment, rising 20.4 per cent year-on-year to $1.4 billion.
Search and Directories remained the largest segment, reaching $2.16 billion. That was up 13.9 per cent year-on-year and represented about 44 per cent of total internet advertising spend.
Gai Le Roy, CEO of IAB Australia, said investment in digital advertising remained solid, with growth coming from a broader advertiser base.
“Investment in Australian digital advertising remains solid, but the growth is coming from a broader base of advertisers than it used to. While large brand advertisers continue to be important drivers of market scale, we are also seeing meaningful investment from SMEs, commerce-led businesses and new international entrants looking to build their presence in Australia.
“Video continues to be the standout performer, and search is also accelerating, the results suggest advertisers are continuing to concentrate spend in a relatively narrow set of environments, despite the important role broader premium content ecosystems play in long-term brand growth and reaching audiences in trusted contexts,” Le Roy said.
Gai Le Roy
Key findings from the report
All video categories recorded double-digit growth in the quarter. Social video was the fastest-growing sub-segment, up 29.4 per cent year-on-year.
BVOD grew 10.1 per cent, supported by high-demand viewing environments and major sporting events. Video now accounts for 73.2 per cent of total display market expenditure, up from 71.4 per cent in Q1 2025.
Infeed and native formats grew 13.2 per cent year-on-year to $287.8 million, while standard display increased 7.7 per cent to $129.5 million.
Search and Directories recorded its fastest growth rate since the 2022 COVID recovery. The segment added about $264 million in spend year-on-year, rising from $1.90 billion in Q1 2025 to $2.16 billion in Q1 2026.
Classifieds also grew 13.9 per cent year-on-year to $787 million. It was up 7.4 per cent quarter-on-quarter.
Audio and category shifts
Audio advertising grew 8.3 per cent year-on-year to $83.5 million in Q1 2026, although total audio was down 11.3 per cent quarter-on-quarter.
Podcasting outperformed streaming audio, rising 12.6 per cent year-on-year to $32.6 million. Streaming audio grew 5.7 per cent to $50.9 million.
Automotive recorded the largest year-on-year increase in share of general display across industry categories, up 1.7 percentage points. IAB Australia said the lift was driven by BVOD and automotive-oriented platforms, with new Chinese car brands now visible in Australian digital advertising spend.
Retail also increased its share year-on-year, up 1.4 percentage points, with investment across multiple BVOD players and major contributors.
Insurance and travel lifted their share quarter-on-quarter, while government advertising increased both year-on-year and quarter-on-quarter. The report linked this to federal campaigns around the fuel crisis in February and March.
Health and beauty, entertainment and media, and FMCG recorded the largest year-on-year share declines. IAB Australia said this was consistent with a pullback in household discretionary advertising spending.
What the report measures
The IAB Australia Internet Advertising Revenue Report is compiled by PwC and includes data from media owners, publishers and advertising platforms operating in Australia.
The report measures five formats: search, classifieds, display, audio and video.
Search includes paid search and search shopping ads. Display covers standard display, native advertising, paid sponsorship content, display ads on email, tenancies and other formats.
Audio includes streaming audio and podcasts, while video covers publisher, outstream, AVOD, social video, BVOD, video podcasting and other video formats.