MAGNA forecasts Australian media growth at 3%
The Australian advertising economy will increase by +3.0% this year, according to the latest forecast by IPG Mediabrands’ media intelligence and investment division, MAGNA. The new forecast is in line with previous MAGNA estimates for this year and sees a similar level of growth to 2017.
Digital remains the primary driver of growth with a projected +9.9% increase in 2018, taking the total ad market to Aus$16.2bn this year, rising to Aus$18.8bn in 2022. Australia remains one of the most advanced and most intense advertising economies, with ad spend per capita of just under $500 per year, second only to the US.
Digital media attracts high proportions of total budgets, hitting 57% in 2018. Because of this commanding share, digital growth is modest compared to the global average. The usual channels – video and social – are still the digital growth drivers, with +23.5% and +16.2% growth expected in 2018 respectively. Mobile advertising already represents the majority of digital advertising spend in Australia (54%), and that will increase to 72% by 2022 as mobile continues to outperform desktop spending.
Says Victor Corones (pictured above), managing director, MAGNA: “There are clearly some high-performing sectors in terms of forthcoming investment, including travel and accommodation, finance, communications, insurance, food and some very minor growth in retail. There are also some sectors remaining under pressure such as automotive, real estate, and entertainment and leisure.”
More broadly, the television market continues to evolve rapidly. CBS took over Network Ten at the end of 2017, and their full line-up of content is migrating to Network Ten stations. Ten also has a video streaming service in the works aimed at rivalling Netflix. Streaming continues to grow with 10% growth in TV screen use outside of typical live broadcast and catch up television. More than 50% of homes have an SVOD subscription.
The reach of television in Australia has only declined slightly, and not nearly as precipitously as it has in other nearby developed markets like New Zealand and Singapore. However viewers continue to reduce their viewing minutes.
Other traditional formats continue to struggle in Australia, with newspaper ad-sales expected to decline by 20% this year, and magazines expected to decrease even more (-26%). Print now represents just 7.5% of total budgets.
Out of Home in Australia is resilient and will increase by nearly +7% this year. Digital OOH is the growth engine within the OOH formats and will increase by +21% this year to reach Aus$477m. The conversion of traditional OOH sites to digital technology continues to fuel digital OOH’s growth.