Venture Insights expects total advertising spend to grow at a 3.2% CAGR to $18.7bn in 2023.
Digital, while being the largest growth driver for AdEx in Australia, will see its growth moderate in the coming years.
Programmatic and addressable TV solutions, along with BVOD, will help traditional broadcasters offset part of the structural decline in television advertising.
We expect AdEx spends to grow at 3.2% CAGR through to 2023 with digital accounting for about 2/3rds of Australian advertising revenues.
Within this, we are seeing a transition across the traditional media players from a pure play advertising based revenue model to an ‘advertising + subscriptions’ based revenue model. However, subscriptions alone may not be enough to stem the flow of ad dollars from traditional formats to digital and the incumbents will have to rely on innovation i.e. programmatic and addressable advertising solutions to improve their overall appeal to advertisers and marketers.
In addition, we also note that while the transition from traditional formats to digital is inevitable, the key difference here is that majority of the digital ad spend growth is flowing through to the international tech giants and going offshore.