Australian advertising spend will grow 4.7 per cent annually between 2015 and 2020, rising from $14.9 billion to $18.7 billion, according to the annual PwC Media and Entertainment Outlook report.
However PwC predicts newspapers’ share of the advertising market will fall in that period from 16.2 per cent to 10 per cent while internet advertising grows from 39 per cent to 51.4 per cent.
The outlook also states mobile advertising will account for 41 per cent of the total internet advertising market by 2020.
Growth in the advertising market slowed slightly to 8.7 per cent compared with 9.1 percent in 2014. Internet advertising experienced the most growth at 28.6 per cent.
In terms of the newspaper market, the outlook values print at $3.1 billion and digital at $589 million in 2015. This market definition consists of print and digital newspapers, advertising and circulation spending and newspaper inserted magazines, which are included in the print figure.
The report forecasts that digital will not equal print by 2020, although print will continue to decline, falling to $1.7 billion while digital continues its steady rise to $1.3 billion.
Circulation meanwhile is declining at a slower rate than advertising, falling 1.6 per cent and 5 per cent respectively.
This points to a misconception by advertisers over the strength of print readership.
“There are great opportunities to grow this business, not manage the decline,” News Corp Australia’s managing director of metro and regional publishing Damian Eales said in the report.
The PwC report finds overall that the Australian entertainment and media market will grow with a compound annual growth rate of 4.1 per cent to $47.4 billion by 2020.
It also shows total consumer and advertising spending in the sector grew by 6.4 percent in 2015, compared to 6.8 percent in 2014. The sector grew by 6.0 percent globally and 7.4 percent in Asia Pacific.
Editor of the PwC Outlook Megan Brownlow said the uptick in growth is moderate, in part reflecting better data capture with the inclusion of newspapers’ direct sales bookings and more digital advertising plays.
She said the Australian industry was not without its long term challenges and should diversify to ensure future growth.
“As we look across Australia’s media and entertainment landscape there is only moderate growth and pockets of high growth in digital. The online ad spend continues to grow, and consumer spending is growing in areas like interactive games,” Ms Brownlow said.
“We are forecasting low growth ahead, so the time has come for the industry to do things differently. Embedding diversity – in your talent, your geography and your business models – should be considered a strategic imperative in the search for growth.”
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