As revealed in latest report from market analysts firm, Frost & Sullivan, the online general advertising market in Australia grew by 21 percent to $768 million in the 12 months to the end of June this year, with online video attracting the lions’ share of the dollars with a growth of 58 percent in that period.
The online video advertising market in Australia is currently standing at $86 million and is predicted to forge further ahead with a compound annual growth rate (CAGR) of 39 percent each year until 2017.
And, video advertising’s share of the online general advertising market, according to Frost & Sullivan, will increase from 11 percent this year to 30 percent in 2017, outperforming all other major online general advertising segments – online display, advertorials, integrated site content and sponsorships and EDM/e-newsletters.
Now, integration of mobile advertising inventory with other online and offline advertising products in an advertising campaign is recognised as “crucial and is more widespread now than a year ago,” especially in the retail sector.
Frost & Sullivan puts growth at a very high 95 percent for mobile advertising during the 12 months to June this year, with predictions for significant growth in the years to come.
Over the next five years for the Australian mobile advertising market is predicted to record strong growth, with expenditure forecast to reach $177 million by 2017, and with a CAGR of 46 percent over that period.
The prediction of particularly strong growth in the mobile advertising market over the next two to three years is attributed to the rising penetration of smartphones, and increasing amounts of mobile content available for advertising opportunities, along with growing acceptance of the mobile advertising medium by agencies and brands.
According to Phil Harpur, Senior Research Manager, Australia & New Zealand ICT Practice at Frost & Sullivan, while Australian mobile carriers continue to explore mobile advertising as a revenue stream, their “influence over the mobile ecosystem is subsiding as online publishers and specialist ad networks are becoming the preferred parties for agencies and brands to place their ad inventory.”
“Global ad networks such as InMobi and AdMob are playing an increasingly important role in the local ecosystem, catering for Australians viewing more content on overseas sites.’’
Harpur also makes the point that the mobile content market in Australia is becoming much more fragmented. “With the addition of apps in the ecosystem there is a broader array of content options available, especially in the social media and gaming space.
“Local mobile advertising ad network specialists such as Big Mobile also continue to grow very strongly,” Harpur said.
Commenting on the broader online general advertising market, Harpur says that online general advertising expenditure “funded from diversion of funds from traditional media advertising, such as newspapers, print directories, direct mail, TV, and radio, is still high.”
“This indicates that the migration from offline to online channels is a significant factor in the growth of the online advertising market. 59% of organisations indicated they had achieved measurable ROI from their online general advertising in 2012.”
On the social media market, Harpur says that social media is “quickly becoming a popular advertising medium,” and he adds, “Facebook has seen strong growth in advertising revenues and the proportion of Australian companies choosing to advertise on Facebook is growing strongly.”
Frost & Sullivan also observes that without incorporating social media into their marketing strategies, organisations acknowledge they risk “failing to connect with a significant online audience.”
And, according to Harpur, forty-three percent of organisations use social media to monitor feedback on company performance or provide customer service and resolve customerissues.
The entry of ad exchanges into the Australian market, reports Frost & Sullivan, is already leading to structural changes to the local online advertising eco-system, with Harpur noting that over last 12 months, agencies have bought a growing proportion of their ads spots directly on ad exchanges directly via Demand Side Platforms (DSPs) rather than via an ad network.
“This is particularly impacting ad networks who deal with second and third tier sites,” Harpur says.