Australia’s internet ad market grows 14% to A$19.8bn as video nears a third of spend

Australia’s internet advertising market grew 14.0% to A$19.8 billion in the financial year to June 2026, the fastest annual expansion since FY22 and a touch above the six-year average of 13.7%. The figures come from the Online Advertising Expenditure Report compiled by PwC Australia for IAB Australia and released on August 31.

Video did most of the heavy lifting. Video ad revenue rose 18.8% to A$5.9 billion, taking its share of the market to 30%, and social video inside that bucket jumped 29.5% to A$2.4 billion, moving from 38% to 41% of all video spend. Search remains the largest category at A$8.6 billion (43% of the total) after growing 13.2%. Classifieds added 12.6% to reach A$3.1 billion, their first double-digit gain in four years. Non-video display lagged with 6.9% growth to A$2.2 billion, while audio rose 6.6% to A$353 million, with podcasts now accounting for 40% of the audio pot.

Momentum picked up towards the end of the year. The June quarter alone was worth A$5.4 billion, up 16.3% on the same period of 2025, with video up 22.6%. Government entered the top five spending verticals for the first time, with a 6.3% share of general display. On the publisher side, connected TV took 60% of video expenditure, up from 51% a year earlier, as desktop’s share slid from 37% to 25%.

Why it matters

The interesting part is where the money is coming from. Gai Le Roy, CEO of IAB Australia, said many established advertisers are working with flat budgets, and that the incremental growth is being fed by small and medium-sized businesses, retailers and overseas advertisers targeting Australian consumers, much of it running always-on rather than in campaign bursts. “A lot of the new spend is coming from outside the usual base,” she said.

That reading is supported by a very different data set. Guideline’s SMI figures for July 2026, reported by Mumbrella on September 2, showed media agency bookings down 1.2% year on year and only 0.7% ahead for the calendar year to date. Agency-booked digital was flat at +0.4%, even as streaming video grew 28% and content sites 13.5%. Metro TV fell 4.1%, newspapers dropped 16.1% and cinema slumped 41.7%. Government spending nearly doubled on the back of the Census 2026 and Defence Force recruitment campaigns. In other words, the double-digit digital growth in the IAB report is largely bypassing the agency pipeline and flowing straight into self-serve platforms.

What’s next

SMI data points to stronger forward bookings for August, and the second half of the calendar year brings the seasonal retail peak in which video and search typically outperform. Separately, IAB Australia published a measurement review on September 2 arguing that the industry needs shared data standards as attribution becomes more complex, a debate that will shape how the next A$20 billion is counted and compared.