Advertising Expenditure In Australia – The Big Players In a Multi-Billion Dollar Industry

Every year in Australia, billions of dollars are spent on advertising. This is across a range of media, which includes television (free-to-air and pay TV), newspapers, internet, magazines, radio, outdoor, and cinema. According to the Australian Financial Review, it was estimated that $11 billion were spent on advertising costs in 2009, in Australia. It was further estimated that in 2010, that figure would increase to $12.5 billion. This raises a number of questions, and one in particular: who is spending so much money on advertising?

For the 2007-2008 financial year, Coles Group and the Commonwealth Government were the two biggest spenders, estimated as forking out up to $180 million each on advertising costs, according to Nielsen research. The top 10 big spenders included names such as: Telstra, Harvey Norman, Woolworths, Nestle/Loreal, NSW and VIC Governments, Suncorp, and Village Cinemas. Nielsen research revealed that the top 6 big spenders were likely to have spent over $120 million each (Nielsen Media Research AdEx July 2007 to June 2008).

All up, the top 50 biggest players in the advertising scene for 2007-2008, were estimated as accounting for 2.8 to 3.1 billion dollars. Taking into consideration that these figures relate to 2007-2008, and the figures mentioned in the previous paragraph refer to 2009-2010, we could estimate that in 2008 there might have been about 10 billion dollars in total spent on advertising. If we ignore government spending, then the top 45 businesses that spent the most on advertising, account for approximately $2.4 to $2.6 billion. Or approximately one quarter of all advertising expenditure.

These big spenders certainly don’t make up one quarter of all businesses in Australia. In fact, according to the Australian Bureau of Statistics, there were approximately 2 million businesses in Australia in 2007 and 96% of these were small businesses. Obviously, none of the top 45 spenders were small businesses, so what this means is that those 45 big spenders actually represent less than 1% of all businesses. In other words, a small minority of businesses (less than 1%) contribute to 25% of all advertising expenditure in Australia.