Total online advertising growth slowed in the first quarter of 2020 to deliver overall year-on-year growth of 3.8 per cent, according to the IAB Australia Online Advertising Expenditure Report (OAER).
The report, compiled by PwC, found that the drop in Australian digital advertising expenditure traditionally experienced after the December holiday quarter was more pronounced this year, with the total advertising in Q1 reaching $2,286 million in expenditure.
The report captures data until 30 March 2020. The IAB said that it reflects Australia’s summer season of bushfires and drought, as well as the traditional post-Christmas decline, but only includes a couple of weeks of data when the country was seriously impacted by the COVID-19 lockdown.
IAB Australia CEO Gai Le Roy said “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. 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.”
The report found that all online advertising categories showed growth year-on-year, but general display, and search and directories declined from the preceding December quarter (12 per cent and 4 per cent respectively).
Classifieds grew by 2 per cent from the December quarter. Video advertising continued to grow, increasing to a 53 per cent share of general display advertising, an 18 per cent growth on the same quarter last year.
IAB said that the skew towards programmatic advertising continued, with 43 per cent of all advertising bought programmatically versus 38 per cent being bought from agencies using insertion orders. The percentage of inventory bought directly from advertisers increased to 19 per cent. Some 56 per cent, the bulk of content publisher’s video inventory, was bought programmatically in the March quarter.
For the first time, the entertainment category entered the top five industry categories, joining retail, finance, real estate and automotive, despite all recording declines against the previous quarter. The technology sector experienced the largest increase in share quarter on quarter, while the travel sector experienced the largest decline.
The report also found that in Q1, content publisher’s desktop video inventory revenue share increased slightly to 36 per cent with an increase in people working from home, up from 34 per cent on the preceding quarter.
Australian digital advertising predictions for the next quarter
The IAB said that it is working on the second wave of its ad impact research to understand the investment intentions of advertisers and agencies for the coming months.
Data to date shows that approximately 50 per cent of advertisers who had previously pulled their spend are now back in the market investing, though at mostly at a reduced level.
The number of those who have reduced or stopped their spending all together appears to have reduced though a significant number continue to delay investment or completely withdraw.
IAB Australia is the peak trade association for online advertising in Australia.