Australian internet ad market hits $18.4bn as video surges nearly 20%

Australia’s internet advertising market grew 11.5% int he past year to reach $18.4 billion, with video cementing its position as the market’s growth engine.

According to the latest IAB Australia Internet Advertising Revenue Report, prepared by PwC Australia, video advertising jumped 19.8% to $5.4 billion, making it the strongest-performing segment of the market.

Search ads reached a new high of $8 billion, up 11.5%, while classified advertising grew 5% to $2.9 billion. Display advertising excluding video recorded modest growth of 1.9% to $2.1 billion. Audio climbed 8.2% to $339 million, with podcasting outperforming streaming audio.

Video now accounts for a whopping 29% of total online advertising expenditure. Within that, social video was a highlight, representing 40% of total video investment for the year and growing 35% year-on-year. Investment also continued across BVOD and other premium video environments.

Connected TV reached a new peak share of content publishers’ video inventory during 2025, supported by high-demand viewing tied to major sporting events.

Gai Le Roy, CEO of IAB Australia, said the results point to a market that is expanding, but not evenly.

“The 2025 results show a market that is growing, but selectively. Overall investment increased strongly, driven primarily by video and search, while other display environments saw more modest movement. Social video and podcasting continue to outperform the market,” Le Roy said.

The December quarter capped the year strongly, with total internet advertising expenditure of $4.9 billion, up 14.4% compared to the same period in 2024. Video advertising for the quarter grew 15.4% year-on-year, continuing to outpace non-video display formats.

Across buying methods, agency buying via insertion order increased its share of content publishers’ display inventory, while programmatic buying lost share during the peak Australian sporting season period, a notable shift given the dominance programmatic has held in recent years.

Retail remained the leading industry category for general display advertising for the fifth consecutive year, followed by automotive and entertainment and media. Financial services, including insurance, recorded the largest increase in share, while home products entered the top five for the first time.

Le Roy said the composition of spend is also evolving.

“While the large media agencies remain important drivers of scale, we’re also seeing strong investment from independent agencies, high-growth brands managing their own media, and SMEs. Established advertisers continue to expand in-house capability, and we’re seeing increased investment from Chinese and other international brands seeking to connect with Australian audiences,” she said.