Tuesday 26th May 2026: The Australian internet advertising market has recorded its strongest ever March quarter, reaching $4.9 billion in Q1 2026, according to the IAB Australia Internet Advertising Revenue Report released today. The Report, prepared by PwC Australia, shows total internet advertising expenditure increased 15.3% year-on-year, up from $4.22 billion in Q1 2025 despite ongoing economic caution. The result is within 1% of the record December 2025 quarter, indicating the traditional seasonal pullback in Q1 has effectively disappeared.
Growth was led by video and search, with both segments continuing to attract sustained investment from advertisers seeking scaled reach, measurable performance and premium audience attention. Video advertising was the fastest growing major segment, increasing 20.4% year-on-year to reach $1.4 billion, while Search and Directories remained the largest segment at $2.16 billion, up 13.9% year-on-year.
Gai Le Roy, CEO of IAB Australia, said: “Investment in Australian digital advertising remains solid, but the growth is coming from a broader base of advertisers than it used to. While large brand advertisers continue to be important drivers of market scale, we are also seeing meaningful investment from SMEs, commerce-led businesses and new international entrants looking to build their presence in Australia.
“Video continues to be the standout performer and search is also accelerating, however the results suggest advertisers are continuing to concentrate spend in a relatively narrow set of environments, despite the important role broader premium content ecosystems play in long-term brand growth and reaching audiences in trusted contexts,” said Le Roy.
Key report findings include:
- All video categories recorded double digital growth. Social video was the fastest growing sub-segment, increasing 29.4% year-on-year, while BVOD grew 10.1%, supported by high-demand viewing environments and major sporting events. Video now accounts for 73.2% of total display market expenditure, up from 71.4% in Q1 2025.
- Infeed and native formats performed strongly, growing year-on-year to $287.8 million, while standard display grew 7.7% year-on-year to $129.5 million.
- Search and Directories grew at the fastest rate since the 2022 COVID recovery and continued to capture the largest share of total internet advertising expenditure at approximately 44% of the market. The segment added approximately $264 million in spend year-on-year, growing from $1.90 billion in Q1 2025 to $2.16 billion in Q1 2026.
- Classifieds delivered solid growth, increasing 13.9% year-on-year to $787 million and up 7.4% quarter-on-quarter.
- Audio advertising grew 8.3% year-on-year to $83.5 million in Q1 2026, with podcasting outperforming streaming audio. Podcasting increased 12.6% year-on-year to $32.6 million, while streaming audio grew 5.7% to $50.9 million. Total audio was down 11.3% quarter-on-quarter, consistent with the seasonal pullback from the December quarter peak.
Automotive recorded the largest increase in share of general display year-on-year across the industry categories, up 1.7 percentage points. This was driven by spend across BVOD and automotive-oriented platforms, with new Chinese car brands now a visible presence in Australian digital advertising investment.
Retail increased its share year-on-year, up 1.4 percentage points, with investment reflected across multiple BVOD players and major contributors, although spend eased from the December quarter peak in line with seasonal patterns. Insurance and travel both lifted share quarter-on-quarter, while government advertising increased both year-on-year and quarter-on-quarter, linked to federal campaigns around the fuel crisis in February and March.
Health and beauty, entertainment and media, and FMCG recorded the largest year-on-year share declines, consistent with a pullback in household discretionary advertising spending.
The IAB Australia Internet Advertising Revenue Report is compiled by PwC and includes data from media owners, publishers and advertising platforms operating in the Australian market.
The five formats measured in the IARR include:
- Search data – paid search and search shopping ads.
- Classifieds – classified ads.
- Display – standard display, native advertising, paid sponsorship content, display ads on email, tenancies and other.
- Audio – audio streaming and audio podcasts.
- Video – internet video (publisher, outstream and AVOID), social video, BVOD, video podcasting and video other.
IAB Australia members can access the report here.
If you would like to find out more about becoming an IAB Australia member, check it out here.