Australia’s internet advertising market has climbed to $18.4 billion, with video emerging as the engine of growth, according to the latest industry data.
The IAB Australia Internet Advertising Revenue Report, prepared by PwC Australia, found the market grew 11.5% year-on-year in 2025, reflecting continued advertiser demand for search, video and emerging digital formats, even as some display segments posted more modest gains.
Video advertising delivered the strongest performance across the market, rising 19.8% year-on-year to $5.4 billion, reinforcing the increasing role of streaming and social video in brand and performance campaigns.
Search remained the largest single segment of the market, reaching $8.0 billion in 2025, also up 11.5% year-on-year and setting a new annual high.
Other formats recorded more incremental growth. Classifieds increased 5% to $2.9 billion, while display advertising excluding video rose 1.9% to $2.1 billion.
Audio advertising reached $339 million, growing 8.2% year-on-year, with podcasting continuing to outpace streaming audio.
Video becomes the market’s growth engine
Video was the largest contributor to growth within display advertising during 2025, with social video significantly increasing its share of total investment.
Social video accounted for 40% of total video expenditure for the calendar year and grew 35.1% year-on-year, alongside sustained advertiser investment in broadcast video on demand (BVOD) and other video environments.
Video’s share of the overall online advertising market also continued to expand, now representing 29% of total online advertising expenditure.
Buying behaviour shifts
The report also pointed to changes in buying patterns across publisher display inventory.
Agency buying via insertion order increased its share in 2025, while programmatic buying lost share during the peak Australian sporting season, reflecting strong demand around major live-viewing environments.
Connected TV also continued to gain ground, reaching a new peak share of content publishers’ video inventory during the year. The growth was supported by high-demand viewing environments tied to major sporting events.
Retail leads advertiser categories
Retail remained the largest industry category for general display advertising across content publishers and media owners for the fifth consecutive year.
It was followed by automotive, entertainment, and media, while financial products and services, including insurance, recorded the largest increase in share during the year.
Home products also entered the top five industry categories for the first time, highlighting shifting advertiser demand across consumer categories.
Gai Le Roy, CEO of IAB Australia, said the results point to a market expanding, but unevenly across formats.
“The 2025 results show a market that is growing, but selectively. Overall investment increased strongly, driven primarily by video and search, while other display environments saw more modest movement. Social video and podcasting continue to outperform the market.”
Le Roy said the mix of advertisers investing in digital channels is also evolving.
“While the large media agencies remain important drivers of scale, we’re also seeing strong investment from independent agencies, high-growth brands managing their own media, and SMEs. Established advertisers continue to expand in-house capability, and we’re seeing increased investment from Chinese and other international brands seeking to connect with Australian audiences.”
December quarter growth accelerates
The report also detailed results for the December 2025 quarter, which recorded $4.9 billion in total internet advertising expenditure, a 14.4% increase over the December 2024 quarter.
Video advertising continued to outperform during the quarter, growing 15.4% year-on-year, further cementing its position as the fastest-growing segment of the online advertising market.
Main image: AI-generated