For those feeling the pinch, relief is on the horizon. Australia's advertising market is set to increase to $13.18 billion by 2017. Unsurprisingly, digital will fuel this growth as data becomes all the more important.
The PwC Entertainment and Media Outlook 2013-2017 has predicted the overall ad market to lift at an compound annual growth rate (CAGR) of 2.7% to $13.18 billion. After a tiny increase last year (0.1%), 2013 will have a healthier boost of 1.6% to $11.72 billion. The following years should see consecutive growth – 2014 at 2.5% to $12.02 billion, 2015 at 2.6% to $12.34 billion, 2016 at 3.5% to 12.77 billion and 2017 at 3.2% to 13.18 billion.
Pay TV and digital will track the highest growth as online advertising is set to overtake free-to-air TV as the highest revenue-generating sector. Newspapers and consumer magazines will continue their downwards trajectory.
The overall entertainment and media market will rise at 2.9% CAGR to $35.74 billion by 2017, while consumer spending will increase at 3.5% CAGR to $22.55 billion.
Key advertising market statistics (click through sub-headings for a more detailed overview of segment):
Online
- Online ad market will grow to $4.85 billion at a CAGR of 9.4%.
- Online has overtaken TV to be the largest segment in 2013.
- Mobile advertising will grow at a CAGR of 25.7% by 2017 to $244 million.
- Online video advertising will grow at a CAGR of 44.1% by 2017 to $559 million.
TV
- Free-to-air TV will remain formidable with a CAGR of 1.7% by 2017 to $3.57 billion.
- Pay TV will grow at a CAGR of 9.6%, which outpaces digital, to $645 million by 2017.
- Digital and issues such as piracy will continue to be a challenge to TV.
- Second screen and content strategies will be key to TV's sustainability
Newspapers
- Newspaper publishers will continue to see declines in their print ad revenues with a CAGR of negative 7.5% to $1.69 billion by 2017. The industry generated $3.47 billion in ad revenues in 2008.
- Increase in digital advertising for traditionally print publishers will not offset the loss of print ad revenues.
Radio
- Radio ad revenues will grow at a CAGR of 1.8% by 2017 to $1.16 billion.
- Australian radio advertising market is mature and resilient but traditional broadcasters will face increasing pressure from digital streaming services and internet radio.
Out-of-home
- Out-of-home will grow at a CAGR of 3.8% by 2017 to $654 million.
- The continued fragmentation of audiences will benefit the out-of-home market.
- Digital technology, urbanisation and travel will continue to fuel growth and innovation in the market.
Magazines
- The consumer magazine market will have a negative CAGR of 2.7% by 2017 to $474 million.
- Consumer magazines will continue to decline until 2017 but should digital revenues for magazine publishers will make a sizeable contribution to the bottom line.
- Circulation revenues will continue to decrease until 2017 when it will grow 1%.
Cinema
- The cinema advertising market will have a CAGR of 5.1% by 2017 to $126 million.
- Australian box office admissions will have a CAGR of 2.1% by 2017 to 96 million.
- Box office spending will have a CAGR of 4.4% by 2017 to $1.39 billion.
- Exhibitors and cinema ad networks will bring forth increasingly sophisticated methods of targeting viewers with data from loyalty programs.
- 72% of cinema screens are now digital and 57% are 3D compatible.
Music
- Digital sales are increasing rapidly and offsetting the declines in physical retail distribution.
- Overall market revenue will increase at CAGR of 1.5% to $1.33 billion, which includes digital distribution, physical distribution and live music events.
The smart use of data will be key to ensuring the sustainability of businesses, especially at a time when brands can be overwhelmed by the sheer amount of data they have access to. But reduced costs in technology such as bandwidth and processing should help.
PwC technology, infocoms, communications and entertainment leader David Wiadrowski said: “There is no doubt the individual is on the rise and organisations need to harness consumer data, the new rivers of gold, to develop new business models if they are to stay relevant and profitable.
“Many Australian businesses already believe they are data-driven when in fact they are data-after – using data to support preferred, tightly held, existing beliefs. The complexity of the data issue is also intensified because organisations now operate in a global market against global players, many of which like Google and Facebook have data in their genes.”
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