Online advertising growth flattens YoY following buoyant 2022, IAB reveals

Economic seasonal factors and an unusually high rate of expenditure in 2022 have resulted in online advertising expenditure slightly declining as per the IAB Australia Online Advertising Expenditure Report (OAER) prepared by PwC Australia. Total advertising expenditure for the quarter ended 31st March 2023 reached $3.426bn, an 0.8% decrease on the same quarter last year.  By contrast, the quarter ending 31st March 2022 recorded an 18.5% increase.

What were the findings of IAB’s survey?

Compared to the quarter ending March 2022, Search and directories remained resilient with 1.9% year on year growth, reaching $1.576bn, while general display reported a 2.7% decline ($1.227bn) and classifieds expenditure dropped 3.9% year on year ($623m). Video advertising outperformed general display reporting 8% growth on the comparative period.

According to IAB Australia’s report, audio was the fastest growing category of general display advertising with a 13% increase on the comparative quarter to reach $51.9 million.

Within audio, podcast increased its share of total audio expenditure by 2%, recording 20.7% year on year growth. Travel entered the top five general display industry categories for the first time since December 2019, joining retail, automotive, finance and entertainment. 

The share of content publishers inventory bought via an agency insertion order continued to increase reaching 48% for the quarter, while inventory purchased direct dropped to 14% and the balance of inventory was bought programmatically (guaranteed deals and RTB/PMP). 

What do the findings mean for the industry?

Gai Le Roy, Chief Executive Officer at IAB Australia
Gai Le Roy, Chief Executive Officer at IAB Australia

Gai Le Roy, CEO of IAB Australia said: “It is no surprise that ad spend is back on bumper levels in early 2022 with marketers taking a cautious approach, but digital investment and digital media consumption continues to outperform the rest of the media market.”

“It is a delight to see the travel category share of the general display market the highest since prior to COVID, with marketing for domestic and international flights and destinations targeting Australians who are excited to hit the road again,” Gai Le Roy further added.