Internet advertising fuelling Australian GDP to value of $17.1bn

26 June 2013, Sydney: Australia’s online advertising market is responsible for contributing $17.1 billion to economic output (GDP) providing over 162,000 direct and up to 238,000 indirect jobs according to a new report, Digital Dollars, released today by PwC.  The report which was commissioned by IAB Australia, found that the sector’s contribution to GDP is forecast to reach $26.5 billion by 2017 with a compound average annual growth rate (CAGR) of 7.5 percent, outpacing other sectors of the economy.
The report also identified the benefits that economic activity of the online advertising industry has on the Australian economy overall.  Using a newly developed social welfare framework which is based on the approach adopted by the Productivity Commission, the report found that the ad supported digital ecosystem is generating over $70 billion of value to consumers, producers and the broader community.  
The economic output of $17.1 billion comes from three main sectors of the internet ecosystem – core, partial and interdependent.  Of these, the core sectors contribute $3.4 billion to GDP and have a CAGR of 9.5 percent to 2017; partial sectors contribute $9.7 billion to GDP and have a CAGR of 6.6 percent; and interdependent sectors organisations contribute $4 billion to GDP and have a CAGR of 8.8 percent until 2017.
Core sector organisations include those involved in the creation and placement of online ads, enterprise staff engaged in commissioning advertising, and some content platforms and sites.  Partial sector organisations are those whose economic activity is partially funded through advertising and include ISPs, the software industry, hardware and other equipment and internet consultants.  Interdependent sector organisations include those that derive some benefits either directly or indirectly from online advertising and include online shopping and content sites that facilitate online education, paid media and entertainment.
According to Samantha Yorke, IAB Australia’s Acting CEO, “This report provides proof of the significant contribution of the digital advertising sector to the broader Australian economy and shines a spotlight on job creation in the sector.  It also clearly demonstrates the positive impact of the sustained investment in digital advertising platforms being made by marketers and advertisers, which grew 15 percent year-on-year to March 2013.”
Jeremy Thorpe, PwC’s economist and PwC partner said: “The economic benefits of online advertising aren’t widely recognised but are enjoyed by consumers, businesses, government and the community as a whole.  Created through a complex, largely unseen value chain, online advertising is an important funding model for the creation and consumption of a diverse range of goods and services.”


Of the $70 billion of additional value the online advertising ecosystem generated, $43 billion was perceived to have been generated for consumers, while $27 billion was generated for producer benefits for both the public and private sector.  While considerable value is considered to have been made by the online advertising industry towards broader community benefits, no quantitative measure has been noted in the report as no robust measurement of the benefits is yet available.

Organisations in this sector are those most heavily reliant on advertising to fund their organisations and who have seen a six-fold increase in online advertising revenues between 2006 and 2009. In 2012 online advertising was estimated to attract 14 percent of total advertising revenues and is forecast to grow to 33 percent of total advertising expenditure by 2016[1].

Partial ad-supported ecosystem industries contribute an estimated 57 percent to the total internet ecoysystem.  Industries considered to fall into this category include those that facilitate access to the internet by customers (ISPs), provide software to consumers (anti-virus etc); provide hardware to consumers (internet connected devices including tablets, smart phone and laptops etc); and provide specialist advise services regarding the use of internet (internet and social media consultants).

Industries in this sector are those that exist alongside the ad-supported ecosystem and derive some benefits either directly or indirectly from online advertising. For example, paid online content that is largely sustained through subscription may never have been discovered by potential consumers without search websites which are sustained by online advertising.  The same can be said for online retail sites that may not generate revenues directly from advertising on their own websites but may rely on other ad supported websites such as search websites or social media to be discovered.

[1] PwC Entertainment and Media Outlook 2012 - 2016


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 40 IAB offices globally, and with a rapidly growing membership, IAB Australia’s principal objective is to increase the share of advertising and marketing dollars that interactive media captures in the marketplace.

IAB Australia’s board includes representatives of Fairfax Media, News Digital Media, REA Group, Network Ten, Yahoo!7, APN News & Media, ninemsn,, Telstra, TressCox Lawyers and AIMIA.  It has four objectives:
• To develop, coordinate and promote industry standards and guidelines that make interactive advertising a simpler and more attractive medium for agencies, advertisers and marketers
• To prove and promote the effectiveness of interactive advertising to advertisers, agencies, marketers, and the press
• To be the primary advocate for the interactive marketing and advertising industry
• To expand the breadth and depth of IAB membership while increasing direct value to members
For further information about IAB Australia please visit:

For more information please contact:
Pru Quinlan
Einsteinz Communications
T: (02) 8905 0995


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