Australian advertising spending will recover by 11% in 2021 to reach $17.5 billion as the economy stabilises and recovers from the pandemic, according to MAGNA, the media research and intelligence division of IPG Mediabrands.
This will surpass the high of 2019, driven by the ongoing strength of digital with the linear market.
Spending has already picked up in fourth quarter of 2020, with brands demonstrating optimism about 2021’s business conditions.
“2021 is a particularly difficult year to forecast, with the delta between potential outcomes perhaps having never been greater,” says Nick Durrant, general manager investment at MAGNA Global.
“On the whole we are optimistic about the potential going in to 2021 however we are certainly prepared for less fortunate developments.
“It seems the underlying economic fundamentals are lining up nicely for a consumer-led recovery next year. Lockdowns, tax cuts and job keeper have put money in people’s pockets and as the future looks brighter with little community transmission and vaccines rolling out, we see people more prepared to spend it.”
In 2020, MAGNA finds that Australia’s advertising market declined by 6.2% to $15.7 billion.
Linear ad sales fell by 25% while digital advertising sales increased by 6%.
TV ad sales fell by 16%, radio by 27%, print 32% and OOH 38%.
The strength by digital came from social media (+12%), digital video (+13%), and search (+7%).
Digital ad sales now represent 68% of total ad budgets, one of the highest shares in the world.
Looking at industry verticals in 2020, advertising spending was weakest in travel, restaurants and automotive. Resilience, on the other hand, came from technology, personal care and pharma.
As with many countries and regions, brands in Australia prioritised “lower funnel” direct advertising formats that support ecommerce sales.
Brand advertising campaigns that target consumers higher in the funnel has been weaker than direct advertising, but has also started to recover in the second half of the year.
The weak parts of digital advertising included static banners (-9%) and other digital advertising (-11%).
In 2021, digital is forecast to grow by 9%.
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