Video boom drives internet ad spend to record $19.8 billion

Australia’s internet advertising market has surged to a record $19.8 billion in FY26, delivering its strongest financial-year growth in four years as video and search spending continued to climb.

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The market grew 14 per cent year on year, ahead of its six-year average growth rate of 13.7 per cent, according to the IAB Australia Internet Advertising Revenue Report.

Video closes in on one-third of ad spend

Video advertising was the fastest-growing major segment, rising 18.8 per cent to $5.9 billion. It now represents 30 per cent of total internet advertising expenditure.

Social video led that growth, jumping 29.5 per cent to $2.4 billion and increasing its share of total video spend from 38 per cent to 41 per cent.

Connected TV also strengthened its position with content media owners. It accounted for 60 per cent of publisher video expenditure in FY26, up from 51 per cent a year earlier.

Desktop’s share fell from 37 per cent to 25 per cent, while mobile increased from 12 per cent to 15 per cent.

Search remains Australia’s biggest digital ad category

Search remained the largest part of the market, accounting for 43 per cent of total spend. Revenue climbed 13.2 per cent to a financial-year record of $8.6 billion.

Gai Le Roy, CEO of IAB Australia, said growth was increasingly being supported by advertisers outside the market’s traditional base.

“Search, video and social all continued to grow strongly in FY26. A lot of the new spend is coming from outside the usual base. While many established advertisers are working with budgets that aren't growing, we're seeing new and increased investment from small and medium businesses, from retailers, and from overseas advertisers targeting Australian audiences.”

Le Roy added: “Much of that activity is always-on rather than tied to traditional campaign cycles, which shows digital becoming a more consistent, everyday part of how brands reach Australians, not just something switched on for key retail or seasonal moments.”

Classifieds rebound as podcast advertising climbs

Classified advertising recorded double-digit annual growth for the first time since FY22, increasing 12.6 per cent to $3.1 billion. Non-video general display rose 6.9 per cent to $2.2 billion, led by a 10.9 per cent lift in infeed and native advertising.

Audio advertising grew 6.6 per cent to $353 million. Podcast advertising increased 10.1 per cent and now represents 40 per cent of total audio spend, while streaming audio was up 4.3 per cent.

Retail remained the largest industry category among content publishers’ reported general display expenditure, increasing its share from 17.2 per cent to 17.8 per cent. Automotive followed at 14.2 per cent, up from 13.7 per cent.

June quarter hits $5.4 billion

The Australian internet advertising market generated $5.4 billion during the June 2026 quarter, a 16.3 per cent increase on the same period last year.

• Search increased 13.4 per cent to $2.335 billion.
• Video climbed 22.6 per cent to $1.677 billion.
• Classifieds rose 16.8 per cent to $789 million.
• Display excluding video grew 10.7 per cent to $580 million.
• Audio increased 9.3 per cent to $94 million.

Social video increased 28.3 per cent during the quarter and represented 41 per cent of total video spend. Podcast advertising also reached a quarterly record of $40 million, up 13.1 per cent year on year and 22.6 per cent from the March quarter.

Government entered the top five industry categories for the June quarter for the first time, reaching a 6.3 per cent share compared with 5.3 per cent a year earlier.

The IAB Australia Internet Advertising Revenue Report is compiled by PwC Australia using data from media owners, publishers and advertising platforms operating in Australia.