Online advertising spend reaches $7.6 billion in 2017 financial year

- Continued double-digit year-on-year growth
- For the first time, mobile advertising now accounts for over 50 percent of total display market
- Video now represents a third of total display market

SYDNEY, 5 September 2017: The Australian online advertising market has once again delivered double-digit growth figures increasing by $799 million to reach $7.6 billion for the full financial year ending June 30th 2017, a 11.7 percent increase over the prior financial year.

“Online advertising continues to deliver robust double digit growth and now accounts for close to 50 percent of advertising spend in Australia,” noted Megan Brownlow, Editor, Australian Entertainment and Media Outlook at PwC. “Digital is now a grown up and established advertising medium and the continued evolution of video and mobile advertising. Video in its own right is approaching a billion dollar business as more brands are realising the benefits of combining the persuasive brand building capabilities of video with the precision targeting that digital affords.”

The data from the latest IAB/PWC Online Advertising Expenditure Report reveals that all online advertising categories experienced double-digit growth in 2017:

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Category Highlights

 General Display: Mobile represents over 50 percent of display dollars for the first time, whilst video advertising is rapidly increasing its share, up 49 percent to $0.9 billion – a third of the total display market.

The auto category was once again the number one display category in 2017 and saw the largest year on year growth, increasing from 17 percent of category share in 2016 to 18.5 percent in 2017. Automotive, along with Real Estate and Retail, account for 41.1 percent of the General Display advertising market.

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Classifieds: This category continues to grow faster than other global markets due to the strong local Australian pure plays. Classifieds grew more than Display and Search, up almost 15 percent year on year.

Mobile advertising highlights

Mobile advertising expenditure now exceeds $2.6 billion, an increase of $641 million (or 32.7 percent) compared to 2016. Of this $2.6 billion expenditure, 46 percent was attributed to mobile search and 54 percent to mobile display. 70 percent was attributed to smartphones and 30 percent to tablets.

Video advertising highlights

Video advertising now accounts for $894.4 million of expenditure, up $294.4 million (or 50 percent) compared to the previous year. It now makes up 32.9 percent of General Display advertising expenditure, compared to 24.3 percent in 2016.

“As mobile and video advertising continues to drive the growth in online advertising, IAB Australia is committed to helping brands, agencies and publishers improve their understanding of the mediums,” added Vijay Solanki, CEO of IAB Australia. “During the last quarter alone, the IAB Video Council has published its inaugural Connected TV White Paper and the Video, Audio and Mobile Councils have published new Glossary of Terms to equip marketers with a common understanding of metrics and terms – with much more to come before the end of 2017.”

Q2 2017 Expenditure Highlights

In the three months ended 30 June 2017, total online advertising was $1.9 billion representing a year-on-year growth of 5.2 percent and increase of 2.9 percent from the prior quarter.

All categories experienced growth compared to the same quarter in the prior year with Classifieds delivering the strongest growth at 18.5 percent.

Mobile advertising stands at $721 million for Q2 and comprises General Display and Search expenditures – with 51 percent attributed to Mobile Display and 49 percent to Mobile Search. Mobile contributed 54.7 percent of General Display expenditure, marginally growing its contribution from 53.5 percent in the March 2017 quarter.

Video remains a significant component of General Display advertising. While year on year growth remains strong, up 32.1 percent, video advertising expenditure experienced a softening in growth in the June quarter compared to the March quarter 2017, up 1.5 percent consistent with the trends seen in the broader advertising market.

Automotive and Real Estate led the General Display market in the June 2017 quarter, representing 36 percent of the reported General Display advertising market. These are the only two categories with a greater than 10 percent share, followed by Retail at 7.6 percent. Automotive has been the leading category for over 5 consecutive years.

Members can download the Full Online Advertising Expenditure Report and Infographic here.

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About the Interactive Advertising Bureau
The Interactive Advertising Bureau (IAB) Limited is the peak trade association for online advertising in Australia and was incorporated in July 2010. As one of over 43 IAB offices globally, and with a rapidly growing membership, IAB Australia's principal objective is to support and enable the media and marketing industry to ensure that they thrive in the digital economy.

The role of the IAB is to work with its members and the broader advertising and marketing industry to assist marketers to identify how best to employ online as part of their marketing strategy, to better target and engage their customers and build their brands.

By addressing the core pillars of growth of the online advertising industry - simplified and standard online audience measurement, research, and online operational standards and guidelines, and regulatory affairs, IAB Australia leverages the skills, experience and commitment of its members to advocate the benefits of online advertising by acting as an authoritative and objective source for all online advertising issues whilst promoting industry-wide best practice.

IAB Australia is a registered not-for-profit organisation; membership fees and revenue generated is invested back into the IAB's membership benefits such as resources, events, reporting, and industry representation.

For further information about IAB Australia please visit: www.iabaustralia.com.au

For further information please contact:

Vijay Solanki
CEO - IAB Australia
T: 0409 089 620
E: Vijay.Solanki@iabaustralia.com.au

Pru Quinlan/Sue Ralston
Einsteinz Communications
T: (02) 8905 0995
E: sue@einsteinz.com.au

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