Online advertising growing, changing

Stephen Withers
Monday, 10 October 2011 13:40

IT Industry - Development

 

The Australian online advertising market is changing as it grows, according to an analyst firm. If you don't like video ads, watch out!

The Australian online general advertising market is set to grow by over 10% per year to $1.051 billion in 2016, according to a report from analyst firm Frost & Sullivan.

 

But the report warns that the nature of online advertising is changing. If you found banner ads annoying, the company predicts "very strong growth rates for online video advertising' - so a chunk of the extra bandwidth that will be at your disposal when the NBN rollout reaches your area could be soaked up by video ads and other "rich media" advertising.

While big names such as NineMSN, Fairfax Media, Yahoo!7 and News Digital Media continue to take a big chunk of online advertising, social media advertising now accounts for 7% of the spend. Almost all of that is going to Facebook, which receives 6% of the total spend.

Also benefiting from video advertising is YouTube, the beneficiary of 4% of the spend.

While mobile advertising is growing faster than the general online advertising market, it is coming off a smaller base. Currently valued at $13.9 million, the market is expected to reach $82 million in 2016.

"The two big trends in advertising over the next five years will be a rapid growth in video advertising driven by an increased presence in online video streaming and significant growth in mobile advertising," said Phil Harpur, Frost & Sullivan's senior research manager for ICT in the Australia and New Zealand market.

"Right now Australian mobile advertising expenditure is low compared to the UK and the USA, despite the fact that Australia's smartphone penetration is now roughly on par with those markets, but this is already starting to change and we anticipate rapid growth as mobile advertising, driven by further adoption of smartphones and strong growth in tablet PCs, gains more acceptance amongst advertising agencies as a crucial part of the overall advertising mix."