WPP Media forecasts 7.4% Australia ad growth as AI reshapes spend
WPP Media forecasts $21.6B Australia ad spend in 2026, led by retail media and search. TV and audio decline as VOD share rises.
WPP Media is projecting Australia’s advertising market will grow 7.4% in 2026, with momentum concentrating in retail media, search, and social as AI-driven formats begin to influence how performance budgets are allocated. The outlook also signals more structural pressure on parts of legacy media as spend continues to shift toward measurable, platform-led channels.
The company outlined the update in its forecast materials, framing AI infrastructure investment and “monetizable interfaces” as a key driver of broader ad-market resilience, even amid inflation and global uncertainty.
Table of contents
Jump to each section:
- What the forecast says about Australia’s 2026 channel mix
- Why AI and “generative search” are starting to matter in media planning
- What this implies for legacy media economics
- What this means for marketers
What the forecast says about Australia’s 2026 channel mix
WPP Media forecasts Australia’s ad market will reach $21.6 billion in 2026, with growth led by channels tied closely to performance and commerce behavior.
Retail media is expected to be the fastest-growing channel, reaching $2.3 billion in 2026 (up 19.5%). WPP Media also expects retail media to overtake total TV advertising revenue by 2028, reaching $3.07 billion and an 8.4% share of the market.
Search remains a major growth engine. WPP Media expects search advertising in Australia to grow 9.5% in 2026 to $7.25 billion. When generative search, including LLM-driven advertising, is included, growth rises to 10.4%, which suggests early incremental demand tied to AI-powered search surfaces.
On the platform side, WPP Media expects social and broader digital platforms (including YouTube) to grow 10% in 2026 and 12.3% in 2027, then moderate to around 7% by 2031.
Despite the performance tilt, WPP Media still expects content-driven advertising (including TV, audio, print, and social video) to account for 63.4% of Australian ad revenue in 2026. That share is forecast to fall to around 58% by 2031 as performance-led channels, retail media, and emerging AI search formats grow faster.
ContentGrip
Why AI and “generative search” are starting to matter in media planning
WPP Media frames AI as a “modern-day gold rush,” arguing that the infrastructure being built around AI, from data centers to power grids, is flowing through technology investment and media platforms, and ultimately influencing the systems that power digital advertising.
Globally, the forecast points to a continued concentration of ad revenue among large technology platforms. Outside China, Alphabet, Meta, and Amazon are expected to account for 57.6% of total ad revenue, while the top 25 sellers globally represent 75%. WPP Media says none of the top 10 sellers is a traditional media owner.
The forecast also quantifies how quickly generative search could become a meaningful line item. WPP Media expects generative search to reach around US$5.1 billion globally in 2026, US$32 billion by 2028, and more than US$100 billion by 2030.
In practice, that matters for marketers because “search” stops being a single budget bucket. If planning and measurement still assume classic query-to-click behavior, teams risk undercounting where discovery and conversion influence is happening as LLM-driven surfaces become monetizable.
What this implies for legacy media economics
The outlook is more challenging across several traditional channels in Australia, with declines that look structural rather than cyclical.
WPP Media forecasts total TV revenue will fall to $3 billion in 2026 (down 6.2%) and decline again to $2.8 billion in 2027. Within that, VOD is expected to account for 29% of total TV revenue in 2026, rising to 66% by 2031, which points to a long rebalancing of value from linear to streaming-led models.
Audio revenue is also expected to decline, falling 4.1% to $1.2 billion in 2026 and a further 1.4% in 2027.
Out-of-home is the exception among traditional channels in the forecast, with revenue expected to rise 7.1% to $1.55 billion in 2026 and reach $1.64 billion in 2027. Cinema is forecast to grow 3.6% in 2026, despite pressure on discretionary spending.
The broader implication is not that “content” disappears, but that the premium attached to content environments increasingly needs to be defended with clearer attention signals, contextual relevance, and measurement approaches that make sense alongside performance-led channels.
What this means for marketers
WPP Media’s numbers reflect a market where growth is real, but the logic of where growth accrues is changing quickly.
- Treat retail media as a core planning discipline, not an add-on
With retail media forecast at $2.3 billion in 2026 and positioned to surpass TV by 2028, it is becoming a primary lever for commerce outcomes. Marketers should plan for retailer-specific creative, measurement, and budget governance, not just incremental tests. - Separate “search” into classic vs. generative behaviors
WPP Media’s uplift from 9.5% to 10.4% growth when including generative search in Australia is small but directional. Teams should start asking how discovery happens when answers are synthesized, and what that means for brand salience, structured product information, and paid placements in LLM-driven environments. - Expect platform concentration to keep influencing pricing and leverage
With Alphabet, Meta, and Amazon expected to represent 57.6% of ad revenue outside China, negotiating power and measurement standards will continue to skew toward large platforms. Diversification decisions should be tied to incremental performance and not just reach targets. - Reframe “content-driven” spend around attention quality, not just format
Even if content-driven advertising remains a majority share in 2026, its projected decline in share by 2031 suggests that budgets tied to TV, audio, and publishing need clearer proof of their role in the performance stack. That can mean tighter experimentation design, better geo tests, and more explicit creative-to-outcome hypotheses.
Marketing teams do not need to assume a single channel wins. The forecast suggests the winners are the systems that connect media exposure to measurable behavior, especially in commerce-adjacent environments.
At the same time, WPP Media’s view that brand recognition will be built in “environments that command engagement, deliver context, and earn trust” is a reminder that performance growth does not remove the need for brand-building. It changes where brand-building must prove its value.
The most resilient media strategies are likely to be the ones that treat AI shifts as a measurement and planning problem first, not just a creative or tooling trend.
