The Australian internet advertising market has recorded its strongest ever March quarter, reaching $4.9 billion in Q1 2026, according to the IAB Australia Internet Advertising Revenue Report released today.
The report, prepared by PwC Australia, shows total internet advertising expenditure increased 15.3 percent year-on-year, up from $4.22 billion in Q1 2025 despite ongoing economic caution. The result is within 1 percent of the record December 2025 quarter, indicating the traditional seasonal pullback in Q1 has effectively disappeared.
Growth was led by video and search, with both segments continuing to attract sustained investment from advertisers seeking scaled reach, measurable performance and audience attention. Video advertising was the fastest-growing major segment, increasing 20.4 percent year-on-year to reach $1.4 billion, while Search and Directories remained the largest segment at $2.16 billion, up 13.9 percent year-on-year.
Gai Le Roy, CEO of IAB Australia, said: “Investment in Australian digital advertising remains solid, but the growth is coming from a broader base of advertisers than it used to. While large brand advertisers continue to be important drivers of market scale, we are also seeing meaningful investment from SMEs, commerce-led businesses and new international entrants looking to build their presence in Australia.
“Video continues to be the standout performer and search is also accelerating, however the results suggest advertisers are continuing to concentrate spend in a relatively narrow set of environments, despite the important role broader premium content ecosystems play in long-term brand growth and reaching audiences in trusted contexts,” said Le Roy.
Key report findings include:
- All video categories recorded double-digit growth. Social video was the fastest-growing sub-segment, increasing 29.4 percent year-on-year, while BVOD grew 10.1 percent, supported by high-demand viewing environments and major sporting events. Video now accounts for 73.2 percent of total display market expenditure, up from 71.4 percent in Q1 2025.
- Infeed and native formats performed strongly, growing 13.2 percent year-on-year to $287.8 million, while standard display grew 7.7 percent year-on-year to $129.5 million.
- Search and Directories grew at the fastest rate since the 2022 COVID recovery and continued to capture the largest share of total internet advertising expenditure at approximately 44 percent of the market. The segment added approximately $264 million in spend year-on-year, growing from $1.90 billion in Q1 2025 to $2.16 billion in Q1 2026.
- Classifieds delivered solid growth, increasing 13.9 percent year-on-year to $787 million and up 7.4 percent quarter-on-quarter.
- Audio advertising grew 8.3 percent year-on-year to $83.5 million in Q1 2026, with podcasting outperforming streaming audio. Podcasting increased 12.6 percent year-on-year to $32.6 million, while streaming audio grew 5.7 percent to $50.9 million. Total audio was down 11.3 percent quarter-on-quarter, consistent with the seasonal pullback from the December quarter peak.
- Automotive recorded the largest increase in share of general display year-on-year across the industry categories, up 1.7 percentage points. This was driven by spend across BVOD and automotive-oriented platforms, with new Chinese car brands now a visible presence in Australian digital advertising investment.
Retail increased its share year-on-year, up 1.4 percentage points, with investment reflected across multiple BVOD players and major contributors, although spend eased from the December quarter peak in line with seasonal patterns. Insurance and travel both lifted share quarter-on-quarter, while government advertising increased both year-on-year and quarter-on-quarter, linked to federal campaigns around the fuel crisis in February and March.
Health and beauty, entertainment and media, and FMCG recorded the largest year-on-year share declines, consistent with a pullback in household discretionary advertising spending.
The IAB Australia Internet Advertising Revenue Report is compiled by PwC and includes data from media owners, publishers and advertising platforms operating in the Australian market.
The five formats measured in the IARR include:
- Search data – paid search and search shopping ads.
- Classifieds – classified ads.
- Display – standard display, native advertising, paid sponsorship content, display ads on email, tenancies and other.
- Audio – audio streaming and audio podcasts.
- Video – internet video (publisher, outstream and AVOID), social video, BVOD, video podcasting and video other.
Visit https://www.iabaustralia.com.au
