Australia, after a bumpy ride in 2024, will see at least some growth in advertising spend this year, according to forecasts by a group of key analysts.
Certainly a federal election due soon will help pump more dollars into the market, as would consumer confidence if interest rates start to fall.
GroupM, dentsu and IPG’s MAGNA have all done their end of year re-forecasts.
The Australian advertising market will grow 3.8% in 2025, according to dentsu.
GroupM sees ad spend up 3.7% in 2025, from 2.2% in 2024. A federal election will likely lead to 150%-160% growth in the political category.
IPG’s MAGNA is more upbeat, forecasting ad spend up 6.5% in 2025 in Australia.
Consumers have been watching their dollars and need extra convincing to part with them.
Coupled to that are the pressures on CMOs. They get it from above: You want this budget but what will that get us in sales? A merry go round, arguing for brand budget but being forced into transactional work.
And in the agency world, it’s been a struggle for many. When accounts are lost, as they inevitably will be, it’s been a harder than usual fight to gain new business to fill the gap. The year has added an extra rock to carry up that fiscal hill.
The story of media platforms, particularly television, is one of budget cuts, bringing down overheads to match the fall in ad revenue. This is clear from the latest results posted to the ASX by Nine Entertainment and Seven West Media.
In a November trading update, Nine told the market it was “seeing no tangible signs of improvement “ in the advertising market but the media group was “more optimistic” about the half year to June 2025.
Seven West Media said revenue for the first half of the current financial year to December was pacing down about 6.5%.
However, Jane Ractliffe, Guideline SMI's APAC managing director, says television, with growth in digital, means that total video is still close to 40% of total ad spend.
“So it's still the most significant media within the Australian landscape,” she said.
“My belief is that, with even better reporting from VOZ Streaming and the like, total share will start to pick up again, because there's just going to be such an interest in all video.
“We're starting to be able to see a lot more federal government spend on TV, advertising all sorts of government departments.
“... before May, we're expecting a federal election. This will be, by far, the key influence on the ad market next year.”
In 2022, between January to May in the lead up to that federal election, government ad spend alone added an extra $110 million, excluding spend from political parties, unions and industry associations.
Media analyst Steve Allen, director of strategy and research at Pearman, sees little relief from torrid media market conditions.
At best 2% to 3% overall growth. Subtract digital and it comes down to flat to negative.
“Once again, the only mediums likely to grow (aside from digital, though this well off is high growth) are outdoor and radio (plus of course Cinema but this is only under 1% of total market),” Allen said.
“We think TV will make a slight recovery, in as much as it will not be as great a decline as experienced the past two years. Just might get to a bit above breakeven, though no signs right now.
“What both Seven and Nine are doing with challenging accurate measurement of ROI in Marketing Mix Modelling, we are convinced will turn the tide.
“A difficult, volatile and challenging year. Survival of the fittest.”
Ben Willee, general manager and media director at Spinach, said the big question on everyone’s lips is whether the market has hit bottom or if there will be a double dip.
“The advertising market is a function of business confidence and consumer confidence,” he said.
“Right now, it’s a bit like listening to a weather forecast telling you to prepare for snow, sun and a cyclone all in the same day. Until the global economy settles it’s dangerous to call one way or the other. Not to mention the significant amount of money coming out of the market going to retail media. I’m not calling it either way until we have at least three months’ worth of trend data matched with clear economic signals.
“In 2025, I can’t help but wonder if we’ll ever see the pendulum swing back from short-term, bottom-of-the-funnel stuff to proper brand-building at the top. You know, the kind of advertising that actually makes people care about a brand rather than just click on a sale. But let’s be honest – it’s not happening anytime soon. Long-term thinking? Let’s hope we see more of that.
“All eyes will be on TV and streaming advertising in 2025. This market is going to be fascinating. Netflix and Amazon will increase the amount of premium video placements in the market and Disney+ won’t be far away. That means more competition for Australian broadcasters in a market they have had largely to themselves.
“Elsewhere on the media landscape, the outdoor advertising market is a classic case of too much of a good thing. Billboards are popping up everywhere – on roadsides, buildings, probably even on your neighbour’s garden shed.
“And, of course, when there’s more inventory the law of supply and demand is clear. Rates could drop faster than a clumsy window cleaner. The industry will need to work very hard to grow share of total ad revenue while protecting yield.
“One of my personal favourites is podcast advertising. There’s no doubt that podcast advertising will grow its share of advertising revenue (along with streaming audio). We’re all glued to our headphones these days, so naturally, the money should follow. There are still some big questions around podcast measurement and that is having an impact on credibility. Until they sort it out, podcast growth will be more of a slow crawl than the industry’s dream of a turbocharged sprint.”
For more analysis and insights, download the AdNews 50-plus page Forecast 2025.
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