Monday, 9 November 2009

New IAB Australia figures show continued growth in Internet advertising

The latest quarterly figures on Internet advertising in Australia have just been released by IAB Australia and they show that the market has recorded continued growth during the tough economic period. The total spend for the latest quarterly period, ending 30th September, reached $466 million, the highest total recorded to date.

The new Online Advertising Expenditure Report (OAER) has been compiled for the IAB by PricewaterhouseCoopers (PwC) as usual, using available data or estimates of advertising spend in the period covered. Although the latest quarterly figures have reached new highs, the year-on-year growth against the same period in 2008 was only up by 3%.

The Search and Directories sector, which is dominated by Google AdWords, is continuing to show healthy growth, despite actual figures from Google being unavailable, so the trend is largely based on market estimates. In total, this sector accounted for 51% of the total online advertising market in Q3 of 2009, and an increase of 12% on the same period a year ago. General Display accounted for 26% of the market and Classifieds 23%, although both of these sectors showed a decline in value compared to the same period a year ago, down 3.8% and 5% respectively.

For the first time, the latest report also captured the online advertising expenditure within the General Display category for the specific media of video, email, CPM (cost per thousand, often referred to as ‘brand’) as well as direct response (often referred to as ‘performance’) advertising. Online video advertising which represented 4% of the General Display category, is on par with figures seen in the US and UK, and is expected to increase sharply in future quarters. Email advertising was 6.5% of General Display whilst CPM advertising (mostly banner advertising) made up 75% of the category, with only 22% reported for response and 3% for a hybrid classification that combines these two forms of advertising.

Overall the online advertising industry is continuing to show healthy growth compared to recent declines of other advertising markets in Australia, so that the online share of the total market of the $13 billion Australian advertising industry continues to grow. However, this continued growth, although slowing against the previous year, continues to come from search advertising sector and particularly Google AdWords in Australia, as more and more companies enter this market to promote their businesses through targeted search marketing.

A spokesman for IAB Australia said that "With continued industry developments in online audience measurement, research demonstrating the effectiveness of online advertising in influencing consumers' purchasing decisions and behaviours, and maturing self-regulatory standards and best practice guidelines, online is now a trusted, core and essential component of effective marketing communications."

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