Australian Digital Advertising market experiences double digit decline

• Full financial year total online advertising market is steady at $9.1 billion

Total online advertising growth continued to slow in the second quarter of 2020, declining by 12% year on year according to the IAB Australia Online Advertising Expenditure Report (OAER).  Although not as heavily impacted as other advertising channels, the report reflects the impact of the nationwide COVID-19 lockdown on the total online advertising market for the April to June quarter.
Gai Le Roy, CEO of IAB Australia commented: “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.”
Additional findings from the IAB OAER Report from PwC for the June quarter include:

  • 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%.
  • Video has outperformed the overall general display market, with no year change in expenditure year on year, increasing its share of the general display market by five percentage points to 53%.
  • The shift to programmatic advertising reached a new peak the latest June quarter with 44% of all advertising on content sites bought programmatically versus 41% being bought from agencies using insertion orders (IOs).  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.
  • A notable shift amongst the top five industry categories occurred during Q2 due to the impact of COVID-19. Real Estate and Entertainment dropped out of the top five, with Media and Technology joining Retail, Automotive and Finance. The Retail sector experienced the largest increase in share quarter on quarter, while the travel sector experienced the largest decline.
  • The Report also found that in Q2, content publisher’s video expenditure share attributed to connected TV increased slightly on previous quarter to 41%, taking share from mobile which was down slightly to 24%. Desktop expenditure accounted for 35%.

IAB OAER for the financial year 2020 reveal the total online advertising market is steady at $9.1 billion, representing a 1% increase year on year. Spend has slowed for all advertising types in financial year 2020 with Classifieds recording the biggest decline, reflecting falls in consumer confidence and spend.

General Display is up 0.8% year on year at $3.4bn, Search and Directories up 3.1% to $4.2 bn, Classifieds is down 3.9% to $1.6bn. Video is the biggest growth category, continuing to achieve double digit growth, up 15.4% to $1.7bn. This growth offsets declines in other formats of general display.

The Report also found share of expenditure moved from desktop to connected TV during financial year 2020. Connected TV accounted for 38% of content publishers video expenditure by device, with desktop at 35% and mobile at 26%. 

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

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