The Interactive Advertising Bureau (IAB) Australia this month released its Internet Advertising Revenue Report (IARR) for the financial year ending June 30, 2024. The report, prepared by PwC Australia, reveals significant growth in the Australian internet advertising market, with total spend reaching $15.6 billion, marking a 9.7% increase year-on-year.
The data, released just one week ago, provides a comprehensive overview of the digital advertising landscape in Australia, highlighting key trends and shifts in advertiser behavior. The report examines various advertising formats, industry categories, and purchasing methods, offering insights into the evolving digital marketing ecosystem.
Video advertising emerged as a standout performer, growing by 18.6% year-on-year to reach $4.1 billion. This substantial increase underscores the growing importance of video content in digital marketing strategies. Search and directories advertising also saw significant growth, increasing by 10.4% to reach $6.9 billion, further cementing its position as a crucial component of digital advertising spend.
Classifieds advertising experienced moderate growth, with revenue increasing by 4.3% year-on-year to $2.5 billion. However, general display advertising (excluding video) saw a slight decline of 1.1%, totaling $2 billion. Traditional standard display formats faced a more significant downturn, falling by 13.1% to $558.5 million.
Digital audio advertising demonstrated robust performance, with a 23.6% increase, reaching $290.2 million. This growth indicates the rising popularity of audio content consumption and advertisers' recognition of its potential as a marketing channel.
Connected TV (CTV) continued to dominate content publishers' video inventory expenditure, increasing its share from 47% to 55% over the financial year. This shift came at the expense of both mobile and desktop expenditure, which decreased during the same period. The trend highlights the growing importance of CTV as a platform for reaching audiences through video advertising.
The report also revealed changes in purchasing methods for internet advertising. Agency buying via insertion order decreased from 46% in FY23 to 42% in FY24. Conversely, client direct buying increased from 15% to 18%, while programmatic purchasing saw a slight uptick from 39% to 40%. These shifts suggest a growing trend towards more direct and automated purchasing methods in the digital advertising space.
Retail maintained its position as the top advertiser industry category for display inventory, representing a 17.7% share of ad spend. The automotive sector followed closely at 15.4%, showing steady growth over recent years after experiencing a slump during the COVID-19 pandemic due to supply chain issues and a lack of new car launches.
Gai Le Roy, CEO of IAB Australia, commented on the findings: "The results for financial year 2024 show that marketers continue to increase their investment in reaching audiences across a range of digital advertising environments. While video and audio formats continue to grow the overall market, there is still a strong skew towards driving short term sales results with strong investments in search and social."
The June 2024 quarter data provided additional insights into the state of the digital advertising market:
- Total revenue for the quarter reached $4.16 billion, representing a 14.1% increase compared to the June 2023 quarter.
- Automotive advertising continued its post-COVID surge, reaching 14.9% of content owner investment, nearly matching retail at 15%.
- Finance, Entertainment, and Health & Beauty rounded out the top five industry categories for the financial year, with 7.9%, 7.9%, and 6.1% of investment, respectively.
- Search and directories grew by 12.1% to $1.85 billion.
- Non-video general display increased by 3.6% to $512 million.
- Classifieds saw significant growth of 20.9%, reaching $704 million.
- Video advertising continued its strong performance, growing by 18.8% to $1.09 billion.
- Within the non-video general display category, audio was a strong contributor to growth, increasing by 15.9% across both streaming audio and podcasting.
- Standard display formats experienced a decline of 4.5%.
The IAB Australia Internet Advertising Revenue Report provides valuable insights for marketers, advertisers, and industry analysts. By examining the growth rates and trends across various advertising formats and industry categories, stakeholders can make informed decisions about their digital marketing strategies and budget allocations.
Key facts
- Total internet advertising spend in Australia reached $15.6 billion for FY 2024
- Overall year-on-year growth rate of 9.7%
- Video advertising grew by 18.6% to $4.1 billion
- Search and directories increased by 10.4% to $6.9 billion
- Classifieds advertising revenue grew by 4.3% to $2.5 billion
- General display (excluding video) fell by 1.1% to $2 billion
- Digital audio advertising increased by 23.6% to $290.2 million
- Connected TV's share of content publishers' video inventory expenditure increased to 55%
- Retail remained the top advertiser industry category with a 17.7% share of display ad spend
- Automotive sector followed with a 15.4% share of display ad spend
- June 2024 quarter saw a 14.1% increase in total revenue compared to the previous year
- Classifieds experienced the highest growth in the June quarter at 20.9%