Australian online ad market tipped to reach $2b in 2009

Stuart Corner
Tuesday, 10 February 2009 01:24

IT Industry - Market

Australia's online advertising market continues to grow, despite the economic crisis and could just pass the$2b mark in 2009, according to IAB Australia's Online Advertising Expenditure Report (OAER).

The report, prepared by PricewaterhouseCoopers, includes financial data from over 1,000 websites. It put 2008 revenues at $1.7b, a 27 percent up on the prior year. Fourth quarter revenue was $462m, a 22 percent increase on Q4 of 2007. However, unsurprisingly, growth slowed dramatically towards the end of the year with Q4 revenues up only 2.4 percent on Q3.

General display advertising and classifieds advertising accounted for 28.1 percent and 23.4 percent respectively of the total online advertising expenditure for the fourth-quarter 2008, while search and directories advertising comprised the remaining 48.5 percent.

PwC's lead partner for technology, entertainment and media, David Wiadrowski, said that display and search advertising had grown strongly with classifieds flagging. "The report shows exceptional year-on-year growth across general display and search and directories for the December 2008 quarter. However signs of the economic slowdown have impacted the classified market during the quarter."

Paul Fisher, CEO of IAB Australia, claimed that the results demonstrate the growing confidence advertisers and agencies have in online advertising, despite adverse conditions. "The figures clearly show that online is now seen by a growing number of marketers and agencies as a 'core' advertising medium, and they are continuing to shift their investment where they can more cost effectively reach and engage their consumers with their brand and direct response messages.

"As marketers and agencies face increasing pressure to gain maximum and measureable returns on their investments we expect this shift to online expenditure will continue and quite possibly surpass $2 billion by the end of the calendar year," said Fisher.

Finance, computers & communications and motor vehicles sectors continue to be the dominant industries using general display advertising, and comprise over 48 percent of the general display spending. Finance - which incorporates business banking, credit cards, home loans, superannuation, personal banking, wealth management and other finance - was the highest spending advertiser industry category in the fourth-quarter 2008 with 21.3 percent, up from 20.2 percent in Q3 2008.

Recruitment continues to be the leading category for classified advertising expenditure, followed by real estate, then automotive. Within the Search and directories market, search is growing at a faster rate than directories.