Internet advertising to reach more than 50 per cent of Australian ad market by 2020

The report’s authors urged the media, marketers and their agencies to push innovation in the face of this major looming disruption.

The annual PwC Australian Entertainment and Media Outlook projects that by 2020 the local ad spend on media will be $16bn and that internet advertising, in its various forms such as display, search, video and classified, will represent $8.2bn – or 51 per cent of paid marketing spend.

“Frankly in Australia we have not been as innovative as we need to be,” said Megan Brownlow, editor of the Outlook. “This is born out by the data.”

The report breaks down the Australian advertising market by media and shows that in the next five years the big winners will be digital, which is projected to grow by 13 per cent, followed by the much smaller interactive games market which will grow by 59.4 per cent, from $37m to $59m.

In the television market free-to-air revenue growth is expected to flatline, amid the shift from terrestrial to IPTV, with revenue growing just 1.0 per cent, from $3.795bn to $3.835bn by 2019.

In contrast, pay-TV is projected to grow from $572m in 2015 to $746m by 2019 on the back of an expected surge in household penetration by Foxtel, from 23.8 per cent to 37.4 per cent.

Australians aged 15 to 65 that watch video at least once a month on a smartphone has increased from 34% in 2013 to 51% in 2014, whereas on tablets the percentage has increased from 29% to 47%. News is the most popular type of content viewed on mobile devices. 21% of consumers watch it on most days, and a further 24% watch it at least once a month on average. There is gaining popularity in live broadcast programs such as sports and news.

Not surprisingly, growth in mobile ad spending is being driven by consumer adoption of mobile devices. Next year, eMarketer estimates, there will be more than 2 billion smartphone users worldwide, over one-quarter of whom will live in China alone. Especially there and in other emerging and developing markets, many consumers are accessing the internet mobile-first and mobile-only, so leading advertisers allocate their digital expenditure to mobile accordingly.

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