Australian internet advertising surges to $19.8bn as new advertisers pile in

Australia’s internet advertising market has surged 14% to $19.8 billion over the past year, with a widening pool of advertisers and rapid growth in video helping digital continue to outpace the broader advertising market.

The latest IAB Australia Internet Advertising Revenue Report, compiled by PwC Australia, shows internet advertising continued its strong run during FY26 even as growth across the wider Australian advertising market remained relatively flat.

Search remains comfortably the largest part of the market, attracting $8.6 billion and accounting for 43% of total internet advertising expenditure.

But video is increasingly doing the heavy lifting on growth.

Video advertising jumped 18.8% year-on-year to $5.9 billion and now represents 30% of all Australian internet advertising expenditure.

Within that, social video grew even faster, soaring 29.5% to $2.4 billion and accounting for 41% of the entire online video advertising market.

The numbers continue a shift evident throughout the past year, but IAB Australia CEO Gai Le Roy said the latest growth was not simply coming from established advertisers shifting more of their existing budgets online.

“A lot of the new spend is coming from outside the usual base,” Le Roy said.

“While many established advertisers are working with budgets that aren't growing, we're seeing new and increased investment from small and medium businesses, from retailers, and from overseas advertisers targeting Australian audiences.”

The changing advertiser mix is potentially as significant as the headline growth.

Internet advertising reached $18.4 billion in calendar 2025 after growing 11.5%, with IAB Australia already pointing at SMEs, high-growth businesses managing media internally and international brands as increasingly important sources of investment.

The March quarter then delivered the strongest Q1 result on record, climbing 15.3% to $4.9 billion and coming within 1% of the traditionally much stronger December quarter.

That suggested the seasonal peaks and troughs that have traditionally shaped advertising expenditure were beginning to flatten.

Le Roy said much of the newer digital activity was now running continuously rather than being switched on around traditional retail or campaign periods.

“Much of that activity is ‘always-on’ rather than tied to traditional campaign cycles, which shows digital becoming a more consistent, everyday part of how brands reach Australians, not just something switched on for key retail or seasonal moments,” she said.

Video's continued rise is also reshaping where that money is going.

The category accounted for 29% of Australian internet advertising expenditure in calendar 2025 after reaching $5.4 billion. It has now moved to 30%, with the latest $5.9 billion result putting it within sight of accounting for almost one in every three dollars spent online.

Social platforms are capturing a sizeable share of that growth.

Social video alone is now a $2.4 billion advertising market, following another near-30% year-on-year increase.

The shift comes as the boundaries between traditional television, streaming, social video and creator content become increasingly blurred for both audiences and advertisers.

Connected TV and BVOD have continued to expand alongside the arrival of advertising tiers across global streaming platforms, while social platforms are attracting both traditional brand budgets and the growing pool of smaller businesses able to buy media directly.

The result is an increasingly fragmented video market, but one attracting significantly more money overall.

It also raises another question for the Australian media industry: how much of that growth stays here.

Global technology platforms including Google, Meta and TikTok remain major beneficiaries of the move towards search and social advertising, putting pressure on Australian publishers, broadcasters and streaming businesses to compete through first-party data, premium environments and measurable advertising outcomes.

The latest numbers nevertheless suggest the Australian advertising pie is not simply being redistributed online.

A growing portion is coming from businesses that historically may not have been major advertising spenders at all.

For marketers and media owners, that may prove to be the more consequential shift behind the $19.8 billion headline.