TAG | Investors warned off online classified ads businesses - despite 25 percent annual growth |
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| by Stuart Corner | |
| Monday, 19 May 2008 | |
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F&S says that revenues in Australia's online classified advertising market reached $396 million in 2007, an increase of 30 percent over the previous calendar year. It is forecasting revenues of $512 million in 2008 and a compound annual growth of 25 percent between 2007 and 2011. It says the major factors influencing market growth include the increasing adoption of the medium by new advertisers and improving yields among existing advertisers. "The advantages of online classified advertising are steadily driving a structural shift away from print. It's a trend we expect will gather pace in the next two-to-three years," said F&S research analyst, Darryl Nelson. "However, before anyone leaps in to invest there are some potential dampeners to consider. These include ongoing consolidation among publishers. the continuing lack of Internet penetration outside metropolitan areas and the uncertain state of the economy." According to F&S, employment dominates the online classifieds market, accounting for 47 percent of revenues, and this market is benefiting from tight labour conditions that are forcing corporate and recruitment agencies alike to increase their advertising to attract candidates. And, it says, "Significantly, online job advertising is starting to show a definite move into new categories, expanding beyond the early adoption sectors of IT and financial services recruitment." F&S predicts the recruitment sector will be worth $504.5 million in 2011. Seek remains the clear leader, attracting 74 percent of market share. An increase in commercial real estate listings has been a major contributor to expansion in the real estate sector over the past 12 months. F&S forecasts 23 percent compound annual growth over the next four years, taking revenues to $242.1 million by 2011. The sector is dominated by REA Group which accounts for 71 percent of market share. Automotive classifieds are growing annually by 27 percent compound and will be worth $174 million in 2011, F&S predicts. The market leader, Carsales Group, accounts for 51 percent. Across all sectors, advertisers cited a range of benefits flowing from online classifieds including increased lead generation, an increased return on advertising investment, and faster speed to market.
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