The Australian Digital Media and Advertising 2013 Tear Down

Summer 2014

Let's take a quick look at the 2013 Digital Media and Advertising Landscape here in Australia.

But before we do a little bit of history.

The Top 10 players in the Australian Convergence Landscape (i.e. Telstra, Optus, Seven, PBL, Google, News Corp. etc) had invested over $75 Billion over the first 15 years of the Internet revolution building and populating the Information Superhighway. The problem being the combined revenues in this emerging digital marketplace space amounted to just $1.25 Billion in 2007. So based on the current rate of return it was going to take about 75 years to pay off the original investment. Hence the need for the government to step up and pay for the next generation network.

For all the talk of convergence, 20 years on the Telcos are still Telcos. The media conglomerates are still media conglomerates and IT is what we import from Asia and the USA. The big difference being, unlike TV, Print has suffered a massive decline and software is ubiquitous and in most part free.

As you can see the big winners are Google and Pay TV. The big losers Newspapers, Magazines and Directories.

What is more interesting is the flatlining of the spend.

Australian Media Advertising Spend 2013

Now let's take a closer look at Print media.

Australian Print Media Advertising Spend 2013

As you can see its total market share has shrunk over the past 6 years. It mirrors the decline in the US Print media market.

What's more, if we factor the growth of the market leader (Google) into the mix we discover just how much Print has declined by the lack of new growth.

Australian Print Media Lost Revenues 2013

The question being why isn't digital media significantly bigger than what it is today? Whay hasn't it captured more market share? The answer being a combination of DIY media (e.g. Facebook) and the relative effectiveness of digital media (i.e. the money is being spent elsewhere (e.g. TV) or not at all).

What happens when we put Mobile into the mix?

Is it simply a case of consumers moving from paying for content to paying for access to the mobile network?

The answer being, somewhat surprisingly, no.

Australian Spend per Capita 2013

Yes, mobile dominates the spend but it isn't growing. In fact, if we look at the detail, it's shrinking.

Australian Spend per Capita 2013

But not by much - about $5.60 on a per capita basis - and if I was to speculate, I would suggest the change in spend is probably the money Australian consumers are now spending on Mobile Apps.

This suggests Australian's now spend more time with media than ever before but they are spending less on experience. Which of course is a challenge for all the players in the landscape. The network effect is driving the cost of media consumption to zero and consumers and advertisers are equally happy to take advantage of this trend.

The question being: Is the future of media just another endless list of links or messages, or will the narrative, the festival of the spectacle, strike back?

We'll just have to wait and see.

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