Report: Digital advertising industry contributes $94bn and 4 per cent of Australian GDP
Australia’s digital advertising industry contributed $94 million to the national GDP and was responsible for $55.5 billion in social value in terms of consumer benefits in 2021-2022, a fresh report claims.
The Ad’ing Value report, commissioned by the Interactive Advertising Bureau (IAB) Australia and produced by PwC, found the digital advertising industry’s contribution is the equivalent of more than 4 per cent of GDP and 3 per cent of total employment in Australia in 2021-2022. It further showed the ecosystem to be responsible for 450,000 jobs, including 24,600 directly.
The social value of digital advertising was a key area under the spotlight in the report. According to Ad’ing Value, the average Australian consumer’s perceived value of access to free ad-supported digital services and content is $544 per annum, or $8.8bn to consumers annually and $1100 to households. Social value included benefits such as strengthening and connecting communities, providing increased access to job opportunities, education and financial information as well as entertainment content.
For instance, 78 per cent of consumers indicated digital content and services enable them to stay in contact more easily with friends and family, increasing to 81 per cent in regional areas. Ad-supported online content and services were most important to lower-income consumers, with those on annual incomes below $50,000 reporting the value they attribute to content and services currently free as roughly double that of consumers with annual incomes of at least $80,000.
There’s also the thriving second-hand marketplace in the mix: 40 per cent of consumers regularly find or purchase second-hand products online via the circular economy, the report noted.
In addition, Ad’ing Value recognised $10.2bn in value from consumption off the back of more closely matched preferences, plus $36.5bn in decreased transaction costs via reduced time and costs. The report also claimed consumers save 25 minutes per transaction by accessing ad-supported digital content and services to research products before purchase, equating to $15.9bn in time savings annually, while there’s a reported $71 per month cost savings from researching or purchasing goods and services online.
Overall, the IAB/PwC report showed $14.7b annual total consumer savings from increased competition between suppliers.
Another notable finding from the report was 44 per cent of digital advertising comes from SMEs, with SMEs receiving 61 per cent of the sector’s business benefits.
In order to further illustrate the flow-on impact of digital advertising, the report highlighted the industry with the most significant employment and output impact is the communications industry. However, industries most heavily investing in marketing also record the largest employment and output impacts, the report authors stated. For example, more than 55,000 jobs are supported in the retail and wholesale trade industries, a sector incorporating FMCG, automotive and technology retailers.
“This report shows the huge value that digital advertising provides to the community through free ad-supported content and services, freely available news and information, the ability to connect with others as well as transactional savings – totalling a whopping $55.5bn,” IAB CEO Gai Le Roy, said. “There is no doubt the main winners are consumers.”
The report defined the digital advertising ecosystem as inclusive of media channels from broadcast television to video on-demand services, gaming, news media, podcasts and streaming radio and digital out of home. It also includes organisations providing supports adtech services, and agencies providing planning, buying, management and design services.
The research incorporates modelling of direct and flow-on benefits from the digital advertising ecosystem, as well as an online survey of more than 1000 Australian consumers between August and September 2022 conducted by Pureprofile.