The digital ad market in Australia is worth $4.4 billion a year and the advertising revenue is projected to rise by about 40 per cent to $5.5 billion by 2021, according to a report released today.
Advertising revenue is forecast to increase by about $4 billion to $6.2 billion by 2020, with growth expected to slow to about 10 per cent in 2021.
Key points:Advertisers will pay more for more content and more relevant ads in Australia than they have ever before, according an Australian ad executiveThe study shows that people are watching more online content than ever beforeThe report predicts the advertising market will grow by more than 40 per per cent by 2021Advertising revenues are projected to grow by 40 per the $5 billion spend in 2020The report, released today, predicts that the advertising industry will grow to $7.1 billion in 2020 and $6 billion by 2022.
The report also shows that the Australian advertising market is being watched by people at a faster rate than ever.
The average person watched about five times as many online videos as they did a decade ago, according the study.
The number of hours spent on video has doubled, and people are consuming a larger amount of digital content.
This trend is likely to continue as video consumption becomes increasingly embedded in the daily life of the average person, and as more of the world’s digital content is viewed.
“Advertising is a key pillar of the Australian economy, underpinning the Australian digital economy,” Australian digital marketer and Head of Strategy at ad firm Atlas, Tom LeCun, said.
“There is an enormous opportunity for Australia to take advantage of this opportunity to grow revenue and spend with greater efficiency.”
The study was based on the analysis of 3,500 adverts posted on Facebook, Google, Twitter, YouTube and AdSense from June 30, 2015 to June 30 this year.
Advertiser spend and revenue figures were based on average revenue per user, per user spend, and average revenue for each of the three ad platforms used.
The study also looked at how many adverts a user viewed on each of these platforms.
The ad spending figures include spending by individuals and businesses.
The figures show that in 2016, about half of the ad spending was from individuals.
However, a smaller proportion of ad spending on YouTube and Google occurred via individuals.
Ad spending by businesses on AdSense was also significantly higher than for individuals, but only marginally so.
About two thirds of the spending on Adsense in 2016 was made by businesses, while the other third was made via individuals, according.
The growth in online ad spending is likely due to the rise in adverts being streamed, as well as the increased exposure that online ads offer to advertisers.
“People are viewing more content than they’ve ever seen before, with digital ads making up a significant proportion of that growth,” Mr LeCunt said.
The data also showed that people were watching more video than ever in Australia.
The amount of content posted to Facebook in the last year was equivalent to about two thirds the amount uploaded in 2012.
In contrast, the amount of video uploaded to YouTube in the same period was equivalent in value to less than one quarter of the amount that was uploaded in 2011.
In terms of audience size, YouTube is growing at a slower pace than Facebook and Google.
But video advertising revenue will rise significantly, as the number of people watching online content grows.
The industry is forecast by the study to grow at 40 per, to $4,000 by 2021.
Ad revenue is expected to grow to more than $6,000 a year by 2020.
Advert data is available to download on the Atlas website.