Advertising industry faces a sluggish FY25

Subdued economic growth and falling GDP rates drive a forecast for flat ad spending in FY25 before a recovery in FY26.

David Kennedy · Venture Insights12 April 2024Period: FY253 min read

6%↓

Decrease in Australian advertising spend (February 2024 pcp)

18.7%↑

Total advertising spending growth (FY22)

Locked

+1more stats

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Abstract

This report analyses the correlation between Australian GDP growth and advertising expenditure, forecasting a sluggish FY25 following a projected 5% decline in FY24. While the pandemic rebound drove 18.7% growth in FY22, current economic headwinds have led to falls across every category, with television particularly impacted. The analysis explores the divergent outlooks for digital, audio, and outdoor sectors versus traditional free-to-air television, which faces increasing pressure from retail media and SVOD platforms.

Key Takeaways

Australian advertising spend fell 6% pcp in February 2024, with declines recorded across every major category.
Total ad spend is projected to contract by 5% in FY24, following a 2.7% decline in CY23.
GDP growth and ad spend remain tightly correlated, with the RBA's 2% growth forecast suggesting a flat FY25.

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Frequently Asked Questions

The Australian advertising market is experiencing a sharp downturn, with total spend falling 6% year-on-year as of February 2024. This follows a 2.7% decline across the 2023 calendar year, indicating a sustained period of volatility after the 18.7% growth peak in FY22.

Expenditure will remain nearly flat through FY25, with a recovery not anticipated until FY26. This sluggish outlook is tied to broader economic conditions, specifically the RBA forecast of 2% annual GDP growth for the FY25 period.

Free-to-air television is the worst-performing category as it loses market share to retail media and SVOD platforms. While the total market is projected to decline by 5% in FY24, digital and audio sectors are showing greater resilience than traditional broadcast formats.

Advertising industry faces a sluggish FY25

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