Unloved and facing regulation, the ad industry plays a $53b card
Australia’s advertising industry has asserted itself as a bigger force than the accommodation and fast food sectors in economic output, pre-empting a crackdown by the Albanese government on gambling and wagering advertising.
The $300.5 million-a-year slice of Australia’s media market could face renewed threat within months. There are signs the fast food industry, which spends $330 million annually, might face similar pressure.
Nike’s famous Just Do It slogan.
Now, the advertising industry is pushing back against further moves to restrict ads. The three organisations representing Australia’s advertising sector have co-funded new research showing they create and support 245,000 Australian jobs and add $53 billion – 2.1 per cent – to Australia’s gross domestic product. Hotels and food add $47 billion.
Compiled by Deloitte Access Economics, the report found $17.7 billion was spent on advertising in Australia last year.
The report was commissioned by the Australian Association of National Advertisers, the Media Federation of Australia and the Advertising Council of Australia, a major display of unity in a usually fractured media industry.
Broadly, the AANA represents big companies that advertise, the MFA covers the media agencies that buy and trade ad space, and the ACA acts for the wider ad agency market. It’s also “supported” by the industry bodies for TV, radio, outdoor media companies and online advertising.
The last time a Deloitte report like this was commissioned was in 2016, when it showed 200,000 people worked in the sector and added $40 billion to the economy.
“There’s a perception of advertising among consumers and some politicians – talk of food and beverage bans, privacy changes, environmental claims. That’s why we think it’s a good time to talk about this,” Josh Faulks, AANA’s chief executive, said. “There is this overall message that is often forgotten. Advertising is a massive driver of economic growth. Fifty-three billion dollars is big, 2.1 per cent is big. It is not inconsequential.”
The industry is largely self-regulatory, and the industry groups would like to keep it that way. Consumers can report ads to Ad Standards, and advertisers adhere to strict codes for food and drink, environmental claims, children’s advertising and wagering. This system is “world-class”, MFA CEO Sophie Madden said. Mr Faulks says there is 96 per cent compliance to the food and beverage code.
The joint pitch is that ads drive down the costs of goods, boost competition and grow the economy. For example, Netflix introduced a tier subsidised by advertising that costs users less. Free-to-air TV is entirely funded by advertising.
“There’s a lot of pressure around regulation, ad restrictions and bans,” Ms Madden said. “It did feel like the appropriate time to start talking about our own industry, and the positive impact of the industry... I don’t need to tell you, these are challenging economic times. Reduced consumers spending, cost of living crisis – that doesn’t seem to be abating.”
The amount spent on advertising in Australia has grown faster than almost every other country measured, including the UK, Norway, the US and Canada. Only Korea grew faster.
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