The “big issues to watch” in 2011 in the Australian interactive advertising market
Article by Paul Fisher. First published in AdNews, January 28 2011
Glowing in the aftermath of the recent Ashes win (yes I'm a Pom!), here are the "big issues to watch" in 2011 in the Australian interactive advertising market - and not a cricketing metaphor among them!
Market growth. PriceWaterhouseCoopers forecasts calendar year 2011 online advertising expenditure to reach $2.519 billion for what they call "wired" internet advertising expenditure, and an additional $37 million for display advertising on mobile devices accessing internet content. I forecast online ad expenditure to reach $2.35 billion by end of June 2011. The share of the total Australian advertising market will increase from the current 16 percent to 19 percent. This additional $350 million (from the $2.2b forecast expenditure in calendar year 2010) will come at the expense of metro newspapers and metro free to air TV.
All three sectors of the online advertising industry - paid search, online classifieds and general display will grow between 15 – 20 percent from 2010 figures. Predictions show online video will continue to be the fastest growing category. Industry sectors that will fund this continued shift will again be underpinned by the "big three" of financial services, automotive and communications and computers, while FMCG, government and yes, retail will also grow their expenditure in online advertising substantially on previous years.
Measurement. Online audience measurement in Australia will have its finest year in 2011 with the forecast conclusion of the IAB's tender and appointment of a preferred supplier for the provision of online audience measurement services in the first half of the year. Standard metrics, improved measurement methodology, more tools for media planners and buyers, and a giant leap forward towards cross-media measurement with other current media measurement services, all herald a new era in online advertising measurement, transparency, reporting and accountability.
Exchanges. There will be a lot more talk than walk on the subject of exchanges – variously called ad exchanges, demand side platforms (DSPs), sales side platforms (SSPs), or data exchanges. As this technology fundamentally changes the way display inventory is bought and sold in the US and EU markets, the global agency groups represented locally here in Australia will also experiment with the technology. In fact, it's already started. Watch the progress to see if the uptake will be as aggressive as is being predicted in global markets.
Privacy. The debate about online privacy will continue to rage, and so it should. The online advertising industry needs to take a lead approach to the protection of consumers' rights online and you will see and hear a lot more about how early on this year. Cool heads are needed in this space, with industry self-regulation the required first step to the continuation of the free internet that we have enjoyed over the past decades. Consumers and advertisers have co-consumed the internet advertising space very collaboratively over these years, and with the rise of technology such as online behavioural advertising and social media, we can continue to protect consumers online, give them informed choice, and offer them the most relevant and valuable advertising they have ever had available.
Display formats. I'm forecasting we will see some experimenting with new larger formats of display advertising as the industry offers creatives, advertisers and consumers more engaging advertising. This will lead the way to more integrated brand advertising especially across TV and online but also print and magazines.
Online video. Consumers' love affair with online video will continue to intensify. Comscore reported 81 percent of Australians online (which equates to over 11 million people) watched a staggering 970 million videos online in July 2010, so this figure is now most likely already over 1 billion each month. This is the reason online video advertising will again be the fastest growing advertising 'sector' this year.
Mobile. Mobile advertising revenue will be captured and reported in Australia which will give the most accurate market reporting of this fast growing medium. We hear and read every year "this is the year of mobile". Well 2011 will certainly see more interest from advertisers, more content on mobiles and tablets from publishers, and of course more units shipped to consumers – just look around you on the bus, train or at lunchtime! The mobile web evolution is very much on the way and there is no stopping it.
Social Media. Social media consumption will continue to dominate the headlines. Against the continuing backdrop of when will Facebook and Twitter go public, advertisers and their agencies will continue to experiment with this environment, investing more of their advertising, marketing, PR and DR budgets into social media, and I hope, integrated with the rest of their digital and other media tactics and strategies.
And finally, every agency group will have a Chief Digital Officer and every media brief will include digital.
Happy New Year! Yes, I think it will be!