No Match Found
Overall, the internet advertising market in Australia has experienced a period of slower growth due to COVID-19, with revenues forecast to remain relatively flat at 0.8 percent in 2020. Despite this, the pandemic has accelerated bifurcation, with some platforms and formats gaining share, and some falling victim to the negative impacts of COVID-19.
The market is predicted to recover steadily, with a predicted CAGR of 4.38 percent over the next five years based on the mid-point forecast scenario.
Video is a subset of Display
COVID-19 has accelerated the evolution of media consumption, pulling forward digital disruption that would have occurred in future years. The benefit of this accelerated adoption has provided armour for the industry in a soft advertising market.
While online video - whether on YouTube, Facebook, Twitch or BVOD - has had a very strong year, classifieds advertising has recorded the strongest decline, likely due to decreasing consumer confidence as a result of the economic environment. Advertisers are continuing to trade programmatically across all available formats, with this method of buying reaching a peak in the June quarter, throughout which 44 percent of all advertising on content sites was bought programmatically, versus 41 percent bought from agencies using insertion orders (IOs).46
Amongst a small few, technology platforms have reaped the rewards of more time spent with digital beyond the stability of advertising revenue; in the three months ending in June 2020, Apple, Amazon, Facebook and Alphabet all reported a surge in earnings, and in August, Apple became the first publicly-traded US company to hit a market capitalisation of US$2 trillion. Similarly, newer entrants such as TikTok are recording strong growth in advertising revenues, albeit from a smaller base.
Not everyone has benefited commercially from this shift in consumption, with the big getting bigger, and the bifurcation of the industry being accelerated. As a result, incumbent media outlets and Australian online publishers are rapidly pursuing digital transformation, partly in order to boost digital advertising revenue to make up for shortfalls in traditional format advertising revenue.
Amid ongoing concerns surrounding the future of independent journalism due to financial pressures that publishers are experiencing, the ACCC has drafted a code that would require Google and Facebook to compensate content providers for the articles that appear on their platforms. The responses from both digital players has been swift and direct, with Google releasing an Open Letter to Australians, citing that the proposed changes will “[put] the Google services [Australians] rely on at risk”48 and Facebook stating that they “will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram”.49
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