Online advertising expenditure grows 17 percent in 12 months

Stuart Corner
Monday, 09 May 2011 05:41

IT Industry - Market

The Interactive Advertising Bureau (IAB) Australia has released its latest Online Advertising Expenditure Report (OAER) showed a 17 percent year-on-year growth in expenditure for the first three months of 2011.

The report, compiled by PriceWaterhouseCoopers, put total expenditure at a record $601m. According to IAB, "Both search and directories and classifieds achieved a record Q1 performance, with search and directories recording 23 percent growth year-on-year, while classifieds increased 19 percent year-on-year. The general display market grew more modestly year-on-year, recording three percent growth."

The report said that search and directories accounted for 54.2 percent of  online advertising expenditure ($326m), classified 24.2 percent ($145m) and display advertising 21.6 percent ($129m).

IAB Australia CEO Paul Fisher suggested that the shift of expenditure away from general display into search was temporary. "Cyclically Q1 is always a cautious quarter from media agencies and their clients and down on Q4. We expect continued double digit growth in search and directories, classifieds and a return to double digit growth for general display in Q2 and it's encouraging to see the strong growth in the display expenditure in the real estate, retail and health, beauty and pharmaceuticals industry categories."

On the basis of previous reports PWC is tipping online advertising expenditure to exceed both TV and newspaper advertising expenditure in 2014. At an IAB conference in February Fisher presented PWC forecasts that had the CAGR for the digital advertising marketing in Australia growing at an average of 14.2 percent between now and 2014, compared to 13.7 percent for Asia Pacific and 10.6 percent globally.

He said: "Online video advertising continues to grow strongly, up 47 percent on Q1 2010 which reflects the continued adoption of this format by advertisers looking to enhance or replace their TV schedules."

The finance, motor vehicles, computers and communications sectors continued as the dominant users of general display advertising during the quarter, representing 38.79 percent of general display spending. The finance industry was once again the biggest spender, responsible for 15.39 percent of general display advertising expenditure, but down from 20 percent in Q1 2010. Real estate recorded the biggest growth in display advertising, doubling year on year to reach 9.1 percent, while Retail and fast moving consumer good also recorded growth year on year.

The 2011 IAB Online Advertising Expenditure Report covers more than 1,000 websites. An executive summary of the report is available on the IAB Australia website. The full report is available only to IAB Australia members.