What you need to know:

• Growth in digital ad spend fell from 36 per cent in the second year of the pandemic to just 9.1 per cent in 2022.
• Q4 was especially weak, up barely a point at a time when inflation is running at over 7 per cent.
• Video is growing its share of digital display advertising and now represents 60 per cent of the category.
• Digital audio revenues reported for first time.

The Great Reopening Retreat is in full swing. Tech companies are culling staff like they were koalas in a NSW nature sanctuary, while ecommerce vendors are discovering those COVID inspired revenue surges were caused by lockdowns rather than strategic management genius.

And now spending on digital advertising has decelerated sharply with growth dropping from 36 per cent in 2021 to barely a pinch above 9 per cent this year.

In fact it might not even have hit that, had the figures had not included digital audio advertising for the first time, which came in at $221mn.

The Q4 results where particularly insipid, up barely one per cent due to reversals in classified, as jobs and real estate markets softened.

For the full year total digital advertising spend reached $14.2bn. Unpacking those numbers:

• Search and display grew to $6.2bn, a below trend result of 8.5 per cent although it remains the largest category.
• Classified experienced the strongest growth - 14 per cent - although it remains the smallest category (those rivers of gold are now barely streams of silver).
• Video outperformed the trend, up 12 per cent to $3.3bn.
• And general display was the worst performer, up 7.7 per cent to $5.5bn.

Retail remains the largest category though its share sipped fractionally with automotive, finance, entertainment and FMCG making up the big five. Of these only entertainment and automotive increased their share, probably because we are going out again after the end of COVID lockdowns, and of course wherever we are going, we have to get there somehow.

According to Gai Le Roy CEO of IAB Australia: “2022 had two distinct growth phases, with 15 per cent for the first six months compared to 2021 and 4 per cent growth in the second half of the year. Despite this slow down, we are seeing encouraging signs including automotive advertiser’s share of display advertising returning to levels not seen since early 2021.”

Hear hear

IAB now has access to commercial radio and audio data, enabling it to track the performance of the sector. The data shows that in the calendar year 2022, digital audio ad spend amounted to $221.2 million, with streaming accounting for 63 per cent of the expenditure and podcasting for 37 per cent.

Ford Ennals, CEO of CRA claimed that “Digital audio has experienced soaring growth in listener numbers and strong advertiser interest, marking it as a significant growth market in Australian media. "It’s great to be able to confirm with IAB that this market has grown so quickly from nothing to over $220 million in an incredibly short space of time.”