Australian Online Ad Market Hits Record $17.2 Billion Driven by Olympics and Election Spending
Australia's internet advertising market surged 10.6% to a record $17.2 billion in fiscal 2025, propelled by heavy spending around the Summer Olympics and federal election campaigns, according to industry data released Thursday.
The Interactive Advertising Bureau Australia Internet Advertising Revenue Report found video advertising emerged as the primary growth driver, jumping 21.9% year-over-year to reach $5 billion and now accounting for 29% of total digital advertising spend. Search advertising maintained its dominance with 44% market share.
"It is pleasing to again see solid growth in investment in digital advertising in FY25," said Gai Le Roy, CEO of IAB Australia. "Brands, large and small, are using advertising investment as a way of assisting growth. The continued increase in video consumption as well as range of video ad products has underpinned the increase of nearly 22% for the digital video ad market."
Video advertising across all formats experienced double-digit growth, with social media platforms capturing the largest gains. Video displayed on social platforms increased 36.7% year-over-year to $1.9 billion, representing 38% of total video expenditure.
Broadcast video-on-demand advertising rose 18.3% to $500 million, while other video advertising formats, which represent 52% of the video market, increased 13.5% to $2.6 billion.
The robust performance reflected increased marketing activity around major events, with election investment serving as the primary driver of growth for both video and general display advertising during the June quarter.
Audio advertising also showed strong momentum, growing 14.1% year-over-year to $331 million and representing 4.7% of total general display advertising. Podcasting reached a new peak, capturing 41% of total online audio advertising during the June quarter.
In contrast, non-video general display advertising, including infeed, native and standard display formats, declined marginally compared to the previous year.
The June quarter alone generated $4.6 billion in advertising spend, marking a 10.1% increase from the same period in 2024. Search advertising led with $2.059 billion, up 10.7%, while video reached $1.368 billion, jumping 25.4%.
Desktop advertising experienced a significant shift, with content publishers and local broadcasters increasing their desktop video inventory expenditure from 29% in FY24 to 37% in FY25. Connected TV investment remained the largest component at 51% share, down slightly from 55% in the previous year, while mobile dropped from 16% to 12%.
Programmatic buying continued its growth trajectory, with 60% of content publishers' video inventory purchased programmatically during the June quarter. However, agency insertion orders remained the most popular buying method for display inventory.
The data revealed significant shifts in advertiser categories, with fast-moving consumer goods emerging as a major growth sector. FMCG expenditure increased substantially, driven heavily by video advertising investment, propelling the category into the top five display advertiser categories with a 6.4% share.
Finance sector spending also expanded during the period, reaching an 8.6% share of total expenditure. Meanwhile, traditional high-spending categories including automotive, retail and entertainment media experienced some softening in their market share, though this occurred against a backdrop of overall market expansion.
The top five industry categories remained unchanged from the previous year, with retail maintaining the greatest share, followed by automotive, entertainment media, finance, and health and beauty sectors. Retail benefited particularly from strong end-of-financial-year spending patterns.
Classifieds advertising proved to be the only major category to decline, dropping 8.3% to $646 million during the June quarter, reflecting ongoing structural changes in how consumers search for goods and services.
The strong performance comes amid broader economic uncertainty, suggesting digital advertising continues to be viewed as essential for business growth across diverse industry sectors. The Olympics and election cycles provided additional stimulus for marketing investment throughout the fiscal year.
Le Roy noted that the diversity of video advertising products available to marketers has expanded significantly, providing more opportunities for brands to engage consumers across multiple touchpoints and platforms.
The growth trajectory positions Australia's digital advertising market among the most robust globally, with video consumption patterns driving sustained investment in advertising technology and creative formats.
Industry observers expect continued expansion as businesses increasingly shift budgets from traditional media to digital platforms, though growth rates may moderate as the market matures and one-off events like major sporting competitions and elections cycle through.
The comprehensive data, compiled from major advertising platforms and agencies, provides the most authoritative measure of Australia's digital advertising market performance and serves as a key benchmark for industry investment decisions.
The report reinforces digital advertising's position as the dominant force in Australia's media landscape, with internet-based formats now capturing the majority of total advertising expenditure across all media channels.
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