It was not all that long ago when TV and other traditional advertising methods dominated global media spend. Now, well and truly immersed in the digital age, we have seen a monumental shift in advertising spend, not just in Australia – but around the world.
According to Magna, the research arm of media buying firm IPG Mediabrands, digital ad spend reached a staggering $209 billion worldwide, equating to 41% of total media spend. Meanwhile, only $178 billion was spent on TV advertising – just 35% of the same market.
Looking back 10 years ago, global TV spend eclipsed digital by a whopping $100 million. Since then, media spend on digital has risen $166 billion, while TV spend has increased by only $36 billion.
Magna suggests that this trend is only going to continue. In the next five years, digital is expected to reach close to $350 billion worldwide and make up more than 50% of the global market, while tradition TV spend will plateau and barely increase at all.
What does this look like in Australia?
In a recent article we published, we highlighted that digital media spend in Australia was set to double TV in 2017, according to a forecast report conducted by Zenith and eMarketer. This year, Australian businesses are expected to spend over $9 billion in digital advertising.
How has this come about? Because Australians are now spending record time on the internet – in fact, more than five hours and 30 minutes every day, which is 80% more than the time we spend watching TV. The clear trend is that more eyes are peeled to desktop and mobile devices than ever before, and we’re spending less time glazing at the TV.
In addition, the time Aussies spend online is mostly spent searching for products or services, with 73% of us turning to a Google or Bing search instead of flipping open the classifieds. In fact, it’s believed that 59% of all Australians are now making their purchases online.
Businesses realise that their money is better spent getting in front of consumers on the internet compared to other traditional forums. This year, Zenith forecasts that there will be a 9.6% growth in internet advertising alone in Australia, and by 2020, it will make up more than 60% of total media ad spend.
Let’s break down digital ad spend even further:
It’s common knowledge that Google and Facebook are the major players in regards to digital advertising. So much so, that Salesforce predicts by the end of 2019, 67% of all digital spend in Australia will be directed to Google Search, YouTube, Facebook and Instagram.
With over 15 million Australians on Facebook and Google having more than 93% market share of all search terms, you can see why businesses are inclined to allocate the majority of their spending to these platforms.
What should Australian businesses be doing about it?
This clear trend tells us that more people are spending more time online – that’s the reality of consumer behaviour right now. Not just in Australia, but across the globe.
Most businesses have got on board with this shift and are allocating their media spend to digital advertising. The good news is that it’s not too late for those businesses that haven’t done this just yet.
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Ultimately, advertising online is now a proven way to achieve outstanding growth for your business.
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