Australia’s internet advertising market is officially booming. According to the latest Internet Advertising Revenue Report (IARR) released by IAB Australia and compiled by PwC, digital ad spend surged by 14.0% year-on-year, reaching a staggering $19.8 billion for the 2026 financial year (FY26). This marks the strongest financial-year growth the industry has seen since FY22, outpacing the long-term six-year average of 13.7%.
So, where exactly is this money going, and what is fueling this massive injection of capital?
Video and Search Lead the Charge
Search advertising continues to hold the crown as the market’s largest single category. Capturing 43% of total spend, search grew 13.2% to hit a record-breaking $8.6 billion. However, video advertising remains the primary growth engine of the digital ecosystem. Video ad spend jumped 18.8% to $5.9 billion, now securing nearly a third of the entire market.
Within the video space, social video is the absolute standout performer, skyrocketing 29.5% to $2.4 billion. Brands are also heavily shifting their budgets toward premium content environments. Connected TV (CTV) now commands 60% of publisher video expenditure, a sharp rise from 51% last year, while traditional desktop video fell significantly to 25%.
A New Wave of Advertisers
Interestingly, this growth isn’t just coming from the usual corporate giants. IAB Australia CEO Gai Le Roy highlighted that while many established brands are working with flat budgets, a massive wave of new investment is coming from small and medium businesses, retailers and overseas advertisers. Furthermore, this spending is shifting to “always-on” strategies rather than traditional, seasonal campaign cycles.
Broad Growth Across the Board
The digital advertising renaissance isn’t limited to video and search:
- Classifieds achieved double-digit growth for the first time since FY22, rising 12.6% to $3.1 billion.
- Audio advertising climbed 6.6% to $353 million, heavily propelled by podcasting, which now makes up 40% of all audio spend.
- Retail and Automotive remain the top industry spenders, dominating general display allocations.
Ultimately, FY26 proved that digital advertising has cemented itself as a consistent, everyday tool for brands looking to connect with Australian audiences. You can read more here.
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