Digital ad spend hits $4.2bn in March quarter as video and audio fuel growth

Australia’s digital advertising market continues to climb, with internet ad spend reaching AU$4.2 billion in the March 2025 quarter, up 11.6% year-on-year, according to new data from the Interactive Advertising Bureau Australia.

The latest IAB Australia Internet Advertising Revenue Report, released today, found that the market also experienced a gentler-than-usual seasonal decline from the previous quarter, down just 1.8% compared to a 4.2% drop in the March 2024 quarter.

Video advertising remained a key driver of growth, surging 23.3% year-on-year to hit $1.16 billion and now accounting for 28% of total investment. Search advertising also saw a solid increase, up 10% to reach $1.9 billion, while classified listings grew 7.8% to $660 million – driven primarily by real estate.

Audio investment saw one of the strongest lifts, jumping 18% year-on-year to $77.3 million, as advertisers continued shifting spend into digital audio environments.

However, not all segments grew. Display advertising, excluding video, softened slightly by 0.9% year-on-year, settling at $461 million. Social media advertising, with revenues included across both display and video, held a 17% share of the total market.

Gai Le Roy, CEO of IAB Australia, said the digital advertising market remained resilient and continues to grow across key channels.

“The Australian digital advertising market again saw double digit growth year on year in the March quarter, with strong increases in video, search, social and audio,” Le Roy said. “While we are seeing solid topline growth there is still some nervousness in the market around long term planning and brand investment which should be tempered by any future interest rate cuts in coming months.”

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Retail and automotive were again the top two display investment categories, representing 17.1% and 12.9% of spend respectively. However, both saw a slight year-on-year decrease in share, while finance, FMCG and insurance categories recorded notable gains.

Desktop advertising also experienced a resurgence in video spend across content publishers and local broadcasters, growing from 32% in the December 2024 quarter to 42% in March 2025. Despite this increase, connected TV (CTV) remains the dominant channel for video inventory, holding 46% share.

The report is considered a key barometer of Australia’s digital ad economy and is compiled quarterly for IAB Australia by PwC.

The figures follow a recent Independent Media Agencies of Australia (IMAA) pulse survey which revealed that 70% of the country’s indie media agencies expect advertising spend to rise by up to 10% this year – suggesting confidence may be returning to market, even amid broader economic caution.

The March quarter results also underscore continued demand for performance-driven and scalable media channels, particularly as marketers navigate inflationary pressure and evolving consumer behaviour.