Not a g'day, mate: Australian digital adspend growth singed by wildfires, pandemic

In a quarter that began with sweeping wildfires and ended with the global COVID-19 pandemic, Australia's digital advertising landscape has taken a painful hit. For the period ending 31 March, adspend slipped 6.3% compared to Q4 of 2020 and crawled ahead barely 3.8% year-over-year as advertisers slashed their budgets, according to a report from IAB.

The report, compiled by PwC, found that the drop in expenditure traditionally experienced after the December holiday quarter was more pronounced this year, with the total advertising in Q1 reaching A$2.29 billion, down from A$2.44 billion in Q4, but ahead of the A$2.20 billion in Q1 of 2019.

While this report only captures of a couple of weeks of the brutal impact of the COVID-19 pandemic on the country, Gai Le Roy, CEO of IAB Australia predicted even grimmer times ahead. “While this report captures the zeitgeist of the tough start to the year we experienced Australia-wide, it precedes the real impact of COVID-19," she said in a release. "There is no doubt that the current quarter will be tougher for all in the industry, but we are seeing shoots of hope in some sectors.”

Some of this strain is beginning to be seen across Australia's advertising landscape, even if a hint of adspend increase is being seen elsewhere, per this report. Expectedly, adspend by auto brands collapsed in the first quarter, with entertainment, retail and real estate making slight gains.

During this time, several campaigns, such as one featuring pop star Kylie Minogue for Tourism Australia have been cancelled and leaders criticised, even as regulators have pushed online giants such as Google and Facebook to share ad dollars with publishers. As advertising dried up, several media organisations, such as the Australian Associated Press, have run aground. 

In terms of category share, video's contribution grew by 18% year-on-year, even as infeed and standard display's contribution fell sharply. The skew toward programmatic advertising continued, with 43% of all advertising bought programmatically, versus 38% being bought from agencies using insertion orders (IOs). The percentage of inventory bought directly from advertisers increased to 19%. Some 56%, the bulk of content publisher’s video inventory, was bought programmatically in the March quarter.