Australia’s internet advertising market grew 14.0 per cent year on year to reach $19.8 billion in the 2026 financial year, recording its strongest annual growth rate in four years, according to IAB Australia.
The result, published in the IAB Australia Internet Advertising Revenue Report (IARR), was also above the market’s six-year average growth rate of 13.7 per cent.
Search remained the largest category, accounting for 43 per cent of total expenditure. Search advertising reached a financial-year record of $8.6 billion, up 13.2 per cent from the previous year.
Video advertising grew 18.8 per cent to $5.9 billion and represented 30 per cent of total internet advertising expenditure, approaching one-third of the market for the first time.
Social video was the fastest-growing video format, increasing 29.5 per cent to $2.4 billion. It accounted for 41 per cent of total video expenditure, compared with 38 per cent a year earlier.
Gai Le Roy, chief executive of IAB Australia, said growth was being supported by investment from a broader range of advertisers.
“Search, video and social all continued to grow strongly in FY26,” Le Roy said.
“A lot of the new spend is coming from outside the usual base. While many established advertisers are working with budgets that aren’t growing, we’re seeing new and increased investment from small and medium businesses, from retailers, and from overseas advertisers targeting Australian audiences.”
Le Roy said much of the activity was increasingly continuous rather than concentrated around traditional campaign periods.
“Much of that activity is always-on rather than tied to traditional campaign cycles, which shows digital becoming a more consistent, everyday part of how brands reach Australians, not just something switched on for key retail or seasonal moments,” she said.
Within video advertising, IAB Australia reported a continued shift in content media owners’ inventory towards connected TV. Connected TV accounted for 60 per cent of publisher video expenditure in FY26, up from 51 per cent in FY25.
Desktop’s share fell to 25 per cent from 37 per cent, while mobile increased to 15 per cent from 12 per cent.
Other segments of the market also recorded growth during the financial year. Classifieds increased 12.6 per cent to $3.1 billion, marking the first double-digit financial-year growth for the category since FY22.
Audio advertising grew 6.6 per cent to $353 million. Podcast advertising increased 10.1 per cent and accounted for 40 per cent of total audio expenditure, while streaming audio rose 4.3 per cent.
Non-video general display advertising increased 6.9 per cent to $2.2 billion, with infeed and native formats recording the strongest growth within the category at 10.9 per cent.
The top five industry categories — Retail, Automotive, Entertainment & Media, Finance and FMCG — accounted for 56 per cent of content publishers’ reported general display expenditure during FY26.
Retail increased its share to 17.8 per cent from 17.2 per cent, while Automotive rose to 14.2 per cent from 13.7 per cent. FMCG’s share eased to 6.1 per cent from 6.4 per cent.
For the June quarter of 2026, the Australian internet advertising market reached $5.4 billion, up 16.3 per cent compared with the June 2025 quarter.
Search advertising increased 13.4 per cent to $2.335 billion during the quarter, while video rose 22.6 per cent to $1.677 billion. Display advertising, excluding video, increased 10.7 per cent to $580 million, classifieds rose 16.8 per cent to $789 million, and audio increased 9.3 per cent to $94 million.
Social video grew 28.3 per cent year on year during the quarter and represented 41 per cent of total video expenditure, compared with 52 per cent for other video formats.
Podcast advertising reached a quarterly peak of $40 million in the June quarter, up 13.1 per cent on the corresponding quarter a year earlier and 22.6 per cent on the March quarter.
Government also entered the top five industry categories for the June quarter for the first time, accounting for 6.3 per cent of expenditure, up from 5.3 per cent a year earlier, according to the report. The category displaced FMCG/Health & Beauty from the prior year’s top five.
The IAB Australia Internet Advertising Revenue Report is compiled by PwC Australia and draws on data from media owners, publishers and advertising platforms operating in the Australian market.