MAGNA’s Global Ad Forecast predicts Australia’s advertising market is set to grow by +4% this year to reach AUD 26.2 billion ($18.2 billion) and will grow by an additional +3% in 2024 to AUD 27.1 billion ($18.8 billion).
This follows last year’s growth by +7%. In this environment, GDP is further growing by +1.6% on a real basis, a downward adjustment from the October IMF forecast of +3.8%. Inflation has also adjusted downward, decreasing this year by -1.0% and will continue to decrease -0.2% in 2024.
Digital advertising spending is growing by +8% to reach AUD 20.5 billion ($14.2 billion). This represents 78% of total ad spending. Mobile advertising spending is leading growth by +11% to AUD 14.7 billion ($10.2 billion). By format, social media (+10%), video (+9%), and search (+8%) is leading the way. In 2024, Australian digital advertising revenues will increase by +6% to reach 80% of total budgets. Digital advertising revenue growth in 2024 will be led by social media, once again, which will increase by +9%.
Linear advertising formats are decreasing by -7% this year to AUD 5.7 billion ($4.0 billion), following last year’s +3% increase. Linear media represents 88% of the pre-COVID linear ad spending total. However, given that television is expected to continue eroding, and print continues its long decline, linear ad spend will never reach the pre-COVID highs in Australia. Television spending is shrinking by -12%. Erosion will continue in 2024 by -9% as viewing shifts away from television to digital formats.
Other linear formats are expanding this year (out of home +5% to AUD 1.1 billion, cinema +15% to AUD 86 million), but radio remains stagnant (0%) at AUD 656 million while print continues its decline (-13% to AUD 365 million). Radio is yet to reach its pre-COVID size.
Australia suffered a weak start to the year in 2023, with total ad spending decreasing by -1% in 1Q. This was partially due to a difficult comparison, with the May 2022 federal election spending, as well as the Beijing Olympics in 2022 causing significant spending in 2022 that didn’t recur in 2023. There are some events in 2023 that will boost spending, though, such as the FIFA Women’s World Cup in July.
In 2024, linear advertising revenues will shrink by -6% to reach AUD 5.4 billion ($3.7 billion). Linear advertising spending will fall to represent just 20% of total budgets. Television spending will continue to shrink by -9% in 2024, 11% of total advertisers spending.
Says Lucy Formosa Morgan (pictured), managing director, MAGNA Australia: “It’s been a slower start to 2023 with challenging global economic conditions and consumers under increasing financial pressure, all of which has made for a jittery market. Much as we’re forecasting a number of the traditional channels to contract, particularly Linear TV, there are areas that remain strong, namely digital (search, video and social) and OOH. Digital naturally is benefitting from consumption habits evolving and the traditional channels growing their digital offerings.”