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Every year PwC sets the standard in commentary on Australia's advertising industry. This year the financial giant predicted that growth in Australia’s advertising expenditure was shrinking fast but noted that online video had taken off. Whilst the report is the gold standard, one wonders if this position is truly reflective of the industry, particularly when it is so difficult to capture accurate data through traditional monitoring services.
The reality is that the Australian advertising industry has grown by an average of 4% year on year between 2009 and 2016 FYE and, according to the World Advertising Research Center, it is forecast to increase by an average of 8% year on year for both FYE 2017 and 2018. This growth is being driven predominantly by digital and mobile advertising.
Various reports have internet advertising sitting at over $7 billion as at the 2016 FYE and all agree that internet advertising now dominates the advertising revenue landscape with 53% to 55% share of total expenditure. No one medium has ever been this dominant over the past 30 years, including newspapers who dominated with an average 40% share of advertising expenditure between 1987 and 2008.
In fact, internet advertising is forecast to reach approximately $8.4 billion as at FYE 2017 and $9.5 billion as at FYE 2018. If industry forecasters are correct this means that in the 10 years between 2009 and 2018 internet expenditure will have grown by a massive by 184% with the internet dominating advertising's coveted share of expenditure since 2014. Keep in mind that internet advertising revenues have only been officially monitored since 2002.
Mobile advertising revenue has been forecast to grow, between 2012 and 2018, by an incredible 582% with the growing channel set to account for 24% of total advertising expenditure as at FYE 2018.
It might surprise some that, despite it's dominance in the industry, television only enjoyed its position as the number one medium (in respect to share of revenues) between 2009 and 2013. The average share during this time was 30% share of revenue, well below the internet's mooted 55%.
Television's reported declines in advertising revenues over recent years have been minimal and television is forecast to achieve a total 11% increase between 2009 and 2018. This means that television should retain a 22% share of total advertising expenditure, a slip of only 8 percentage points from when it dominated the industry.
However, the prediction is not so healthy for traditional print media platforms, particularly newspapers. Having experienced a loss of -10% year on year since 2009, the drop in advertising revenues looks to increase with a mooted -94% total overall decline in expenditure between 2009 and 2018 said to be the outcome.
Because of the way advertising revenue streams are monitored, none of these reports show the blurring of the lines as traditional media owners embrace digital and mobile technologies with mastheads now sitting comfortably at the forefront of the multi-media landscape. The true percentage of advertising revenues owned by traditional media owners such as publishing houses Fairfax and News or television networks such as Nine, TEN and Seven are not adequately reported, often presenting a misleading picture of their position in the industry.