The Digital Apocalypse Has Arrived! Will 2017 Be The End Of Media In Australia?

The Digital Apocalypse Has Arrived! Will 2017 Be The End Of Media In Australia?

In this dramatic guest post, Andrew Birmingham, the editor in chief of, paints a rather dystopic picture for a lot of Australian media, predicting their ad revenues (and business models) are heading in one direction- off a cliff!

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Google, Facebook. Facebook, Google, let’s call the whole thing off.

Last week the IAB released its quarterly approximation of online ad spend. It suggested that the shift of budgets into online advertising continues unabated as does the unparalleled migration in media wealth from local players like Fairfax to international dotcoms like Google and Facebook.

Online advertising spend in Australia is up over 20 per cent quarter on quarter. The total reached just over $1.88 billion for the three months ending 30 September 2016 according to the latest PwC/IAB Online Advertising Expenditure Report.

This being an IAB report the usual caveats apply. Neither Google nor Facebook who between them take the lion’s share of online expenditure in Australia actually provide their numbers, so the figures are estimates (estimates are code for “made up”).

However the IAB says its data is in line with the recently released Commercial Economic Advisory of Australia (CEASA) report which showed digital media represents over 48 per cent of the total Australian expenditure for the first half of financial year 2016.

In other words (and taking the IAB numbers at face value) we are fast approaching the infamous double digital plurality – half of all advertising will be digital and half all digital advertising will be Google and Facebook.

Most on the non digital revenue is television advertising, while most of the digital revenues not hoovered up by Google and Facebook go to the three big classified sites – Seek, and Car Sales, and then Sensis takes a chunk.

That leaves all those other publishers (who fund the IAB) scrapping for leftovers – it is not enough to sustain them all. It’s barely enough to sustain even a few of them in a meaningful sense.

After 22 years of trying Australia’s media publishers have largely failed to reveal a sustainable business model. No wonder Citi warned its clients to rush to the Fairfax exit last week.

Still the IAB marches gamely on, however it’s worth noting that search – overwhelmingly the biggest category and almost entirely Google does not even rate a mention in the IAB media release until the second last paragraph. Nor does the fact that Search (i.e. Google) is growing market share (so is Facebook in display).

The PwC/IAB report suggests that FMCG advertisers are continuing to shift their attention to digital video responsible for 23.5 per cent of total video expenditure and spending almost three-times as much on video as General Display advertising (8.2 per cent).This shift in spend has been validated by Nielsen in its recent Pathmatics Q3 data, which reported Kimberly Clark, Unilever and Proctor & Gamble as the top FMCG advertisers in the digital video market.

According to IAB CEO, Vijay Solanki. “The dominance of FCMG in video shows marketers are warming to the longer term effects of cross-device, and even cross-media campaigns that are underpinned by digital video.”

He said marketers understand relationship building and its value and they are re-investing dollars where they can realise strong, measurable ROI and brand recall. The spend on digital video in these major industry categories speaks volumes in that regard.

“Screens deliver video and personalised, optimised experiences,” said Solanki. “We’ve seen almost two-thirds of the market going to screens, with digital also strengthening the outdoor ad industry.  Digital video can drive brand uplift in a targeted, immersive and measurable way. It can put the right creative on steroids.”

According to the report Classifieds grew 13.4 per cent over the year, Search and Directories grew a 22.8 per cent and General Display increased 21 per cent.

Finally, expenditure on mobile advertising grew to reach $570.7 million in the September quarter, a five percent increase on last quarter and a 56.6 per cent jump compared to Q3 2015. Smartphones continue to attract a majority of the mobile dollars, making up 64 per cent of the total mobile expenditure.

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