Australian businesses are spending up big on advertising with the industry growing at a faster rate than the US and UK and digital advertising accounting for most of that growth, according to a report from Deloitte Access Economics.
The report reveals that the Australian advertising industry was worth $53 billion to the economy in 2022, up by $13 billion, or 12 per cent, since 2014.
The growth positions the industry above the accommodation and food services industry at $47 billion and the telecommunications industry at $52 billion. It is also more than half the economic value of the retail industry at $95 billion.
Commissioned by the Advertising Council of Australia, the Australian Association of National Advertisers and the Media Federation of Australia, the report builds on an earlier report published by Deloitte Access Economics in 2016.
The 2022 advertising spend in Australia hit $17.7 billion, which was up 170 per cent from two years earlier in 2000.
“One of the key drivers of this growth has been the rise of digital advertising, which has revolutionised the industry and created new opportunities for businesses of all sizes,” says the report,
“In 2022, digital advertising accounted for around 67 per cent of all advertising spend in Australia, up from just 35 per cent in 2014.”
The significant share of digital advertising expenditure in Australia compares with just 1 per cent of total advertising expenditure in 2000.
“In addition to the rise of digital advertising, traditional forms of advertising, such as linear television and print media, continue to play an important role in the industry,” says the report.
While inflation has created headwinds for the advertising industry in recent years, impacting the amount business are willing to spend, the report reveals that since 2014 the Australian advertising spend is up $4.4 billion in nominal terms and $1.5 billion, once adjusted for inflation.
“Despite inflationary headwinds, expenditure on advertising rebounded quickly from the dip caused by COVID in 2020, highlighting its importance to industry during the economic recovery phase,” it says.
Josh Faulks, the CEO of the Australian Association of National Advertisers, says the report affirms advertising as a key driver of economic activity.
“Through tough economic times, we have continued to see remarkable growth, outpacing many other countries on a per capita basis,” Faulks says.
“The importance of the advertising industry to a prosperous Australian economy cannot be understated.”
Among the key findings of the Deloitte Access Economics report is that the sector contributed jobs growth at twice the pace of all other industries combined over the past six years.
Advertising employment has increased by almost 30,000 since previous research in 2016, a growth of 5 per annum, compared to an average 2 per cent across all industries.
The latest estimates in 2021 show that advertising directly employed 85,900 people in Australia, with almost half – or 45 per cent - located in NSW, followed by Victoria (29 per cent) and Queensland (15 per cent).
"This report demonstrates just how important advertising is for a healthy economy,” says Tony Hale, the CEO of the Advertising Council of Australia.
“The industry plays a significant role in building strong, recognised brands that contribute to long-term economic growth, with the top 100 Australian brands valued at $194 billion in 2023 alone.
“Our combined creative capabilities can and do drive positive change, and champion the values that resonate with the business community and public.”
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