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Australian Online Advertising Cracks $2 billion Mark

19 Aug 2010

The Australian online advertising market has broken through the $2 billion barrier with online advertising expenditure data released this week in the Interactive Advertising Bureau's (IAB) Australia's Online Advertising Expenditure Report (OAER) compiled by PricewaterhouseCoopers (PwC) noting a total expenditure of $2.043 billion for the 12 months ended 30 June 2010.


The report also showed online advertising expenditure totalled $552.5m in Q2 2010, a record quarter and a 22 per cent year-on-year increase from Q2 2009.


All three sectors of the market experienced growth in the 12 months ending 30 June 2010, with general display advertising increasing 11 per cent, classifieds increasing nine per cent; and search and directories advertising increasing 16 per cent. For the full year general display advertising accounted for 26.8 per cent of total expenditure while classifieds advertising accounted for 23.0 per cent and search and directories advertising accounted for 50.2 per cent.


Commenting on the Report, Paul Fisher, CEO of IAB Australia, said "The long awaited and much forecast $2 billion dollar mark has finally been breached. Powered by strong growth in all three categories and with continued double digit growth forecast, Australian online advertising expenditure is on track to exceed $3billion in the next four years.


"With increased online consumption, explosive growth in the use of social media and online video content and advertising; and improved online audience measurement, advertisers and media agencies continue to grow their advertising investment where they get the best results - online," said Mr Fisher.


Finance, motor vehicles, computers and communications sectors continue to be the dominant users of general display advertising, accounting for 44 per cent of the category - down from 48 per cent in the previous year. Motor vehicle manufacturers have remained the single largest spender for the year, responsible for 10.7 per cent of general display advertising expenditure. FMCG, retail, health and beauty and insurance were the fastest growing industry sectors.


Email based advertising reach $33.8m during the 12 months to 30th June and $8.7 million in Q2 2010 - an increase from $7.9 million recorded in Q1 2010. Video based advertising comprised $25.3m of advertising expenditure for the 12 months to 30th June and $9.6 million in Q2 2010 - a significant jump from $5.7 million in Q1 2010.


The dominant pricing method continues to be Cost per Thousand (CPM), with 75 per cent of general display advertising based on CPM while direct response accounts for just 25 per cent for the full year ended 30 June 2010 - and across the last two quarters.


Year on year comparative data is not yet available for email or video based advertising, nor the pricing model breakdown.


Real estate was the leading category for classifieds advertising expenditure in the 12 months ended 30 June 2010 followed by recruitment then automotive. This reflects the current quarter results but is a change from the preceding year when recruitment dominated the sector, followed by real estate and then automotive.


The 2010 IAB Online Advertising Expenditure Report covers more than 1,000 websites.


Source: IAB


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