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.The number of advertising spaces in main stream media, such as television, is limited and so competition for those spaces is extremely fierce. In many cases, and across different media, the advertising spots go to the highest bidder. We all know money is power, and it is especially evident in the competitive world of advertising. If we considered advertising expenditure as an indication of power within the advertising industry, then we could even go so far as to estimate that just 1% of businesses have power over 25% of the industry. Clearly, this is disproportionate and begs the question: how can small businesses hope to compete in the world of advertising? How can the little guy make a name for himself, in a playing field dominated by heavy-handed players?Luckily, thanks to the internet, there is now a tremendous variety of new options for the little guy. There are new alternatives to the traditional and often expensive mainstream media, and ways to even up the playing field, or even tilt it in your advantage.