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Online ad market set to pass $3b

  • 15 August 2011
  • Written by 
  • Published in Market

The Australian online advertising market is on track to surpass $3b in FY2012 following its 20 percent growth to $2.455b in the year to 30 June 2011, according to IAB Australia's Online Advertising Expenditure Report (OAER) compiled by PricewaterhouseCoopers (PwC).

According to IAB, search and directories and online classifieds were the main contributors to growth: both recorded 23 percent growth year-on year to reach $1264m and $579m respectively for FY11. The general display market grew 12 percent to $612m. However growth early in the year was offset by a decline of nine percent in the six months to 30 June compared to the corresponding period last year.

Video advertising grew 53 percent year-on year to reach almost $40m annually. IAB said: "Further growth is expected in this sector, with current expenditure representing just 6.5 percent of online display advertising in comparison to the 14 percent market share it holds in the US.

The finance, computers and communication, and automotive industry sectors all dominated the general display advertising category, together accounting for 41.4 percent of the total general advertising expenditure. The automotive category was particularly strong over the past 12 months, comprising 11.57 percent of the general display spending for the year. Real Estate was the leading category for classifieds advertising expenditure in the 12 months ended 30 June 2011 followed by recruitment then automotive. Search and directories accounted for 51.5 percent of overall online advertising expenditure, classified for 23.6 percent and display 24.9 percent.

Retail the standout growth sector
According to IAB CEO, Paul Fisher, one of the standout areas for growth was the retail sector. "Despite, or perhaps because of the many reported challenges facing the industry, the retail sector has shown strong growth in online advertising in the past year. However the sector accounted for only just six percent of all display advertising.

In contrast to the general strong growth and in opposition to overseas trends, online advertising of fast moving consumer goods (FMCG) actually declined over the year, by 0.5 percent to $34m, only 5.5 percent of display advertising.

IAB said: "These results substantially lag the UK where in the same period the consumer packaged goods sector claimed 13 percent of all display advertising spend and the total spend by the FMCG sector grew 30 percent year on year. IAB offered not explanation for the contrary behaviour of the Australian market.

The figures are compiled by PWC on the basis of data submitted to it by online advertising companies representing over 1000 web sites.

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