Online advertising on track to reach $3bn in 2012

Online advertising is on track to achieve its $3 billion milestone by 2012 according to IAB Australia, who today reported that total online advertising expenditure for 2010 was $2.265 billion.  The IAB Australia Online Advertising Expenditure Report (OAER), which is compiled by PricewaterhouseCoopers, noted year-on-year growth of $393.25 million representing 21 percent overall growth from the 2009 calendar year.

Online advertising expenditure in Australia for the three months ended 31 December 2010 totalled $627.75 million, the largest quarter ever recorded. This is an increase of $115.25 million, or 22 percent from the fourth-quarter 2009.

According to Paul Fisher, CEO of IAB Australia, online advertising is now a core medium for advertisers in Australia and its unparalleled growth in Australian media is driven by a combination of consumers; advertisers and their agencies.

“Consumers’ voracious appetite for content, services, social connection, search and video online is growing dramatically every year, with Australians watching almost 1 billion videos online each month.   As a result we are experiencing a structural shift in Australia and globally in the advertising and marketing industry as advertisers and agencies restructure their organizations and their budgets to better equip themselves to reach, engage and influence their customers online.

“Continued strong year-on-year growth, as well as record quarters, places the industry on a clear trajectory to surpass the $3 billion milestone by the end of 2012. PwC forecasts continued growth of 15.5 percent through 2011 and 14.3 percent in 2012,” said Mr Fisher.

“Online growth in 2011 will be underpinned with IAB Australia’s strong program of activity including the endorsement of a preferred supplier for the provision of online audience measurement services; published standards, guidelines and best practice guides for online video advertising, display and rich media; Australian case studies; and events demonstrating how online advertising works best for advertisers,” concluded Mr Fisher.  

The general display advertising and search sectors both performed very strongly for the full year, with display advertising growing 22 percent and accounting for $605.25 million or 27 percent of the total expenditure for the 12 months.  Search and directories advertising accounted for $1,128.25 million or 50 percent of total expenditure growing 19 percent year on year.  Classified advertising accounted for 23 percent of total expenditure for the year or $531 million; and experienced a 24 percent growth year on year.

Six key industry sectors drove the growth in general display during the last quarter of 2010.  Together these six sectors were responsible for an increase in their online advertising spend of over $86 million for the full year.

-          Motor Vehicle industry - up $21.5m (35 percent growth)

-          Finance - up $19.2m (20 percent growth)

-          Retail - up $11.9m (66 percent growth)

-          Health / Beauty / Pharmaceuticals - up $8.4m  (37 percent growth)

-          Government - up $8.2m  (40 percent growth)

-          Entertainment and Leisure - up $8.1m (21 percent growth)

Video based advertising continued to strongly increase, with total advertising spend of $9.7million for the fourth quarter, representing 83 percent year-on-year growth.  The total ad-spend for video advertising in 2010 was $33.4 million. 

The 2010 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 made available to IAB Australia members only.