Much like its western counterparts, Australia's audiences are flocking to social media and video-on-demand channels. But the country, famed for warmer weather and vast beaches, also leans more heavily to outdoor advertising channels generating high engagement of messages across the full day from sunrise to sunset.
As part of PMW’s Global Spotlight series, we delve into the popular channels, biggest challenges and recent success stories to help performance marketers optimise their investments and plan future growth in the region.
Market overview: world’s 12th largest economy offers growth for digital platforms and online shopping
Australia, famed for its sun, sea, and surf, continues to stand out among developed economies thanks to robust domestic demand and spending. It has the 12th largest economy in the world, and despite being home to just 0.3% of the world’s population, it accounts for 1.7% of the global economy.
With a well‑educated and affluent population of over 25 million, the country offers consumers with high consumption habits and strong demand for high‑value products. Until the global pandemic, Australia had a reputation for being ‘recession-proof’ and was the only major economy in the world to have avoided recession for a record 28 years.
Australia is also shaping up to be one of the world's most attractive markets for digital platforms and online shopping. A Google/Kantar study shows 81% of adults in Australia aged under 55 now shop online. Euromonitor ranks Australia as the world’s 4th most attractive online consumer market, just behind South Korea, United Kingdom and the United States.
And according to GlobalData, the Australian e-commerce market was estimated to register a growth of 13% to reach AUD69bn (US$50.2bn) in 2022, as consumers increasingly shift from offline to online purchasing.
Media channels: social media tops the popularity stakes
Social media reigns king in the popularity stakes. Australians keep entrenching themselves in digital channels, spending an average 107 hours online in January 2023.
"If popularity can be measured by time spent and engagement, social media wins the popularity contest with 81% of the population being active social media users, spending approximately two hours and four minutes a day [on platforms]," says Kellyn Coetzee, Head of Performance Media and Analytics, Reprise Digital Australia.
From a device perspective, it is no surprise that smartphones lead the way. According to a recent Ipsos study, 19.2 million Australians spend on average 82 hours online; 14.1 million Australians accessed PCs or laptops, spending an average of 32 minutes online, and 3.6 million were on tablets spending on average 61 hours online.
Similar to wider global trends, Australia has seen a decline in traditional TV viewing and a mass adoption of VOD.
"Whilst Broadcast VOD initially saw a strong increase in viewership, the ever more fragmented Subscription VOD landscape has disrupted this growth, with Netflix, Prime, Binge, Stan (to name a few) all vying for consumers’ viewing time," says Gerry Bowness, Head of Digital, Mediahub.
"Coupled with the continued popularity of YouTube and emerging social video platforms, this has created a strong, but far more fragmented VOD ecosystem."
Viewership of video content continues to surge, growing 17% year-on-year. Closely following are social media channels, particularly with younger audiences who are heavily engaged 3+ hours per day across texting, WhatsApp, TikTok and Instagram.
Top 3 social networks, shopping platforms and apps
Social networks: Facebook (18,500,000 Monthly Active Australian Users); YouTube (17,500,000 Unique Australian Visitors per month); WhatsApp (12,000,000 Active Australian Users)
Shopping platforms: Amazon (14,460,000 users); Apple (11,872,000 users); Woolworths (11,434,000 users)
Apps: MyGovID: MyGovID is used as the mobile entry point to many different Australian Government services that citizens and residents utilise.
Google Wallet: Australians continue their move away from physical cash towards digital wallets. Users tap to pay everywhere Google Pay is accepted – whether it is buying a ticket to board a plane or going to a movie and everything in between.
Service Victoria: Victoria is one of Australia’s seven states and the Service Victoria app is a hugely popular way for residents to access services and get things done in Victoria.
"Our youth audiences consider friendships and staying connected as one of the most important activities," says Virginia Hyland, CEO, Havas Media Group Australia. "We are also a country that has amazing weather and beaches, and so during the warmer months we are out and about until late. This supports outdoor advertising channels where we see high engagement of messages across the full day from sunrise to sunset."
Adspend trends: retail is king but travel bouncing back post-pandemic
Retail has been the top spending sector for the past three years, with a spend of approximately $1bn in 2022, according to the Standard Media Index.
Automotive sits in the number two spot, and whilst it has been slowly growing over the past two years, it still hasn’t fully recovered to pre-pandemic levels, with 2022 spend 23% down on 2019.
Travel has had a strong recovery since the borders reopened, with many Australians and expats taking advantage, and this is reflected in the level of marketing spend which is almost back to pre-pandemic levels. Video is also growing its share of digital display advertising and now dominates, accounting for 60% of the category.
"Retail media channels, combined with e-commerce platforms (via social channels, website or foot traffic) are in clear focus," says Hyland. "Importantly there is a greater investment in the data capture of audiences. Media budget opportuning is broader than considering paid media channels to ensure that we are capturing audiences with the ability to re-engage and build smarter messaging to focus on high value customers for brands."
Digital and data privacy: a long-standing hot topic
Digital and data privacy has always been a hot topic in Australia. “With a number of high profile data breaches occurring in recent years, the Australian population is on red alert for data privacy," says Bowness.
"One of the most sensitive cases was the hacking of major health insurer Medibank, in which customer files were stolen that included information on diagnosis and procedures."
However, from a consumer perspective, attitudes towards digital and data privacy in Australia are becoming more aware and nuanced.
"The average rate of consent to cookies has climbed year-on-year from 31% to about 60% 2022," says Coetzee. "The growing demand for greater transparency and accountability in the use of personal data is also a hot topic, and the Privacy Review is likely to have sweeping implications for personalisation, targeting and storage of first party data in the next few years."
Hyland says many businesses have lacked discipline in creating policies that protect data privacy of the individual. "There is now a greater acceptance that Australia will need to put in place laws of protection and protocols which are in step with more advanced countries."
Regulation: proposed changes to signal overhaul of privacy regime
On 17 Feb 2023, Australia’s Federal Attorney General released a 300-page document outlining what is being described as the biggest overhaul to Australia’s privacy regime in 20 years.
The proposed changes would have a fundamental impact for marketing, tech and media companies on how they undertake digital marketing, advertising, targeting and personal data collection under this proposal.
According to Mi3, one of the largest proposed changes would involve explicit consent requirements for geolocation tracking and for the trading of personal data, which have been expanded widely versus current privacy law.
Targeting for advertising purposes would fall under the privacy act for the first time, and will increase the compliance burdens for firms who will require new skills and capabilities which will need to explain in the language of a person with “below average intelligence” how their data is being used. If they do not explain it, companies cannot use it.
"Whilst the industry is still pouring over the details contained in the document, it is clear that privacy is front and centre when it comes to the agenda put forward by the current Government," says Jules Hall, CEO, The Hallway.
Hyland believes GDPR standards for data protection operating in the EU and the UK should be followed. “Even though the Australian government is still developing new standards, the onus on companies is to be ahead of the curve in protecting their clients’ data.
"Brand trust will become critical for companies to retain customers and it is wise to be on the front foot of protecting information gathered."
Performance marketing in Australia: campaign success stories
We asked our experts to name the top campaigns they have seen in the country recently.
To promote its LEGO CITY Stuntz range, LEGO joined forces with the kings and queens of extreme, Nitro Circus, for its 2022 Australian tour.
"One of my favourite recent campaigns is from One Green Bean, Havas Labs and Host/Havas, where they taught Alexa to understand and talk true blue Aussie – ‘please add mozzie spray to my shopping list'," says Hyland. "It illustrates how a global brand creates cultural relevance and engagement."
Hall cites examples such as British Airways’ ‘Reasons to Travel’ campaign, which brought over 500 real reasons to travel to life across print, out-of-home, TV/content and digital, or The Hallway's 'Ask the Google App', Australia's first large scale data driven campaign at scale, but adds that “there hasn't been a highly visible campaign created to this level of sophistication in Australia of late".