Australian ad spend to grow 2.5% in 2019, 3.4% in 2020 – Magna

News 24 Jun 2019 - 2 min read

Australian ad spend to grow 2.5% in 2019, 3.4% in 2020 – Magna

By Media Release - IPG Mediabrands

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Tags: advertising, media, Magna, IPG Mediabrands, Australia, Victor Corones

Australia’s media advertising economy is predicted to grow by +2.5% in 2019 to reach $17.0 billion according to IPG Mediabrands’ media intelligence and investment division Magna.

The firm suggests growth will increase to 3.4% in 2020, though remaining some way off the 5.4% recorded in 2018.

Magna cites low manufacturing figures, concern around the pace of trade and knock-on effects of trade wars as key headwinds, alongside the deflationary residential property market and low wage growth. It said modest federal election spending had masked an underlying weakness in the market.

For 2019, digital revenues will continue to drive growth, the majority through mobile, but a maturing market means single digit increases (+7.5%) for the first time since 2001, according Magna Australia managing director, Victor Corones.

While the firm predicts growth for video, social and search, it says linear TV revenue will continue to decline (-4.7% in 2019) with BVOD is likely to deliver a close to flat result.

While linear TV audiences come under increasing pressure from streaming services, Magna said the introduction of the Virtual Oz (VOZ) measurement system, now expected in 2020, should bolster free-to-air TV revenues.

While Magna predicts an increase in sporting telecasts on linear television, many on smaller networks with an increased focus on women's sport. It said the new events are not yet significantly impacting overall TV revenues but help maintain audiences. The next big sporting event that could deliver an advertising windfall is the 2020 Summer Olympics in Tokyo.

Magna’s data also sees print media, as with most mature advertising markets, coming under continued pressure. Newspaper advertising spend will decrease by -13.5% this year and Magazine performance will be at -17%. Terrestrial radio is stable at +1% growth year-on-year. Out-of-Home will grow +4.9% this year, weaker than last year’s +9.4% performance, but still robust compared to the rest of offline media formats. Digital OOH will grow the fastest, but not to the degree that it has in past years due to a slowdown in conversions of classic format OOH sites to digital.