Australian online advertising expenditure continues to grow, recording a seven percent year-over-year increase with total revenue edging to $7.9 billion for the full year according to the IAB/PwC Online Advertising Expenditure Report. All categories experienced growth with classified advertising leading the way at 15 percent year-on-year growth to reach $1.5 billion in 2017 thanks to strong local companies including REA Group, Carsales.com and Seek. Real Estate remains the leading segment in classifieds, followed by Recruitment and Automotive.
The strength of the Australian classifieds market driven by local players has meant that the local market is quite different from the US and UK in a time when global trends and structure tends to dominate most industries. While Classifieds now represents nearly one in five digital ad dollars in Australia, in the US it’s only four % of ad spend.
Elizabeth Minogue, Executive General Manager, Media & Content, REA Group said “Our growth has been driven by the strength of our consumer experiences, which translates to high consumer engagement. We have over 1 million Australians visiting realestate.com.au every day, which means both our real estate advertisers and also other media advertises are able to reach the largest and most engaged audience of property seekers.”
Search and Directories continues to be the dominant sector, recording five percent growth in CY17 to reach $3.6 billion, representing 45 percent of all advertising dollars spent in Australia. General Display grew six percent to top $2.8 billion and 36% of the market, with the video component of display growing 43 percent to reach $1.1 billion in total.
“2017 was a challenging year for all advertising supported media yet the digital ad market saw continued growth from a very strong base,” said IAB Director of Research Gai Le Roy. “We are seeing a breadth of different advertising options and formats driving significant revenue including video, native, content and in-feed advertising.”
Video advertising grew $329 million (or 43%) from $760 million in 2016 to $1.1 billion in 2017, demonstrating a positive trend for publishers as brands seek premium environments in which to showcase their offerings. Technology improvements enhancing publishers’ ability to sell and serve high quality, viewable rich content, along with growth in revenue for connected TV inventory, suggests this is a trend which should continue.
The growth in video advertising revenue is validated by the recently released OzTam Australian Video Viewing Report Quarter 4, 2017 which found that video advertising revenue surged through 2017 underpinned by strong video consumption on digital devices including desktop, phone and tablet. The report also noted that digital video now represents 23 percent of video/TV consumption across all screens for people over 18-years old (with 77 percent being live TV/playback) and younger Australians view 54 percent of their video/TV content on digital devices.
Rahul Asthana, Senior Marketing Director, Digital & eCommerce Leader, ANZ at Kimberly-Clark said: “With brands like Huggies, UbyKotex, Kleenex and Depend in the Kimberly-Clark portfolio touching a broad consumer base of Australian families, we want to be wherever they are. Technology, data and the consumption trends of our consumers in a fragmented media environment means they are still watching TV on TV, but also consuming digital video content on other devices and in different spaces. This confluence of technology and data means we take a ‘total screen’ approach, enabling us to reach more consumers and tell our stories across more screens than ever before.”
Pippa Leary, Nine’s Commercial Director – Digital Sales commented: “The market is clearly recognising the power of online video, particularly when it is professionally produced content, reaching a mass audience at scale, in a brand safe environment. These results underline the growing power of, particularly, broadcast video on demand (BVOD) to tell a brand story in a digital format and are set to continue to grow as marketers seek to tap the opportunity offered by the major uptake of connected TVs.”
Mobile advertising expenditure also surged, increasing by $793 million to reach $3.1 billion for 2017, a 35% increase. Of this, 73% was attributed to smartphones and 27% to tablets, while the spend was split evenly between mobile Search and mobile display.
Anthony Saines, Managing Director Commercial at carsales.com Limited commented: “The robust growth in mobile advertising spend should surprise no one. Consumers have shifted attention and engagement to mobile devices and smart advertisers have followed them. As a platform, mobile advertising will likely continue to increase its share of the advertising wallet and it is important as a publisher to have a philosophy of ‘mobile first’ when developing new products and services.”
The latest IAB/PwC Online Advertising Expenditure Report also detailed the advertising spend for Q4 2017, noting that it reached $2.12 billion, representing a 10.5 percent growth over the comparative 2016 quarter. Total General Display advertising increased by 21.1 percent in Q4 2017 compared to the same quarter in 2016, a result of the steady growth of Mobile and Video advertising.
Also in Q4 2017, General Display advertising bounced back from its relatively soft performance in the first three quarters of the year, recording a 14.2 percent increase on Q4 2016 and 21.1 percent increase from Q3 2017. Video was a key driver for the growth in General Display, increasing 41% on Q4 2016 representing $344 million of the quarter’s ad spend. FMCG (representing a 9.9 percent share) and automotive (with a 9.6 percent share) were the top two segments in video expenditure.
The full report is available for IAB Australia members at www.iabaustralia.com.au.
About the Interactive Advertising Bureau
The Interactive Advertising Bureau (IAB) Limited www.iabaustralia.com.au is the peak trade association for online advertising in Australia and was incorporated in July 2010. As one of over 43 IAB offices globally, and with a rapidly growing membership, IAB Australia's principal objective is to support and enable the media and marketing industry to ensure that they thrive in the digital economy.
The role of the IAB is to work with its members and the broader advertising and marketing industry to assist marketers to identify how best to employ online as part of their marketing strategy, to better target and engage their customers and build their brands.
By addressing the core pillars of growth of the online advertising industry - simplified and standard online audience measurement, research, and online operational standards and guidelines, and regulatory affairs, IAB Australia leverages the skills, experience and commitment of its members to advocate the benefits of online advertising by acting as an authoritative and objective source for all online advertising issues whilst promoting industry-wide best practice.
IAB Australia is a registered not-for-profit organisation; membership fees and revenue generated is invested back into the IAB's membership benefits such as resources, events, reporting, and industry representation.