Australian digital adpend bounces back

Nov 24, 2020 | Australia and New Zealand, Content marketing, Online advertising

After gaining approval in the Senate on Wednesday night, the code got the final tick of approval to become law in the House of Representatives on Thursday, following last-minute amendments. The one-of-a-kind law obligates tech companies like Facebook and Google to compensate media companies for using news content on the platforms. The code cleared its final hurdle following negotiations with Facebook, a week after the company blocked news content for users in Australia. On Tuesday, Facebook said it intended to restore Australian news pages "in the coming days" and after the new law was passed, Treasurer Josh Frydenberg said the company pledged to restore news articles in Australia within the next 48 hours. The US tech giants had been fiercely opposed to the unprecedented new law - with Facebook arguing it "fundamentally misunderstands the relationship between our platform and publishers who use it". The site even temporarily removed access to all news content in the country on its platform in opposition of its legislation. Rod Sims, the competition regulator who drafted the code, said he was satisfied that the new amended law would address the market imbalance between Australian news publishers and the two gateways to the internet. "The purpose of the code is to address the market power that clearly Google and Facebook have," he said. "Google and Facebook need media, but they don't need any particular media company, and that meant media companies couldn't do commercial deals." Google had already struck deals with major Australian news businesses including News Corp and Seven West Media in recent weeks.
Australian Online ad spend across general display, search and classified all rose significantly in the third quarter, as the country reels from the impact of the Covid-10 pandemic.

The latest Interactive Advertising Bureau (IAB) Australia digital advertising figures show ad spending is rebounding, with an 11.3% increase between Q2 and Q3, 2020.

According to the latest quarterly IAB Australia Online Advertising Expenditure Report, digital advertising chalked up 11.3 per cent growth in the three months to 30 September 2020 to reach $2.26 billion.

The report found all advertising categories to have achieved growth against Q2, which was hit by the negative impact of the COVID-19 crisis on advertising overall.

The largest share of spend in Q3 was search and directories, representing 45 per cent of all expenditure or $1 billion in spend over the quarter. This was followed by general display at 38 per cent and worth $871m, then classifieds (17 per cent and $386m). Year-on-year, general display was up 0.9 per cent, while search and directories and classified sectors were both down by -6.9 per cent and -11.5 per cent respectively.

IAB said all general display formats including video, standard display and infeed/native advertising, experienced double-digit growth at 11 per cent, 10 per cent and 19 per cent respectively. Mobile represented two-thirds of general display advertising and 63 per cent of search and directories.

Video advertising was also seen to be shifting towards pre-pandemic results with CTV inventory rising the highest growth across digital screens.
“It’s been a challenging year, but the growth this quarter in terms of digital formats signals the industry is bouncing back,” commented IAG Australia CEO, Gai Le Roy. “We are now entering what is traditional considered the industry’s strongest quarter and we anticipate continuation of the growth through to the end of the year.”

In terms of sectors, IAB found retail reflected 10.3 per cent of Q3 2020 general display spend, up nearly a full per cent year-on-year, while automotive, which represented 14.1 per cent, was down from 22.4 per cent in Q3, 2019. Finance was another increased spender, up to 9.5 per cent of share in Q3, 2020, compared to 6.6 per cent in Q3, 2019.

According to IAB’s Q2, 2020 report, Australia’s online advertising revenue across the April – June quarter declined by 12 per cent year-on-year, a reflection of the COVBID-19 impact on marketing spend nationally. The biggest area to be hit was classifieds, down 22. 7 per cent over the period.

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