Online Advertising continues strong double digit growth through 2009

15 February 2010: Australia’s online advertising market has continued to defy the broader advertising market decline, recording strong double digit growth to reach $1.87billion for the full calendar year 2009.  

The results, which were released today by IAB Australia in its Online Advertising Expenditure Report (OAER) compiled by PricewaterhouseCoopers (PwC), also showed that online advertising reached $978.75 million for the last six months of 2009, suggesting that the industry is on track to exceed $2billion in the current financial year. 

Online advertising expenditure in Australia for the three months ended 31 December 2009 totalled $513 million, the largest fourth-quarter recorded. This is an increase of $50.5 million, or 10.9 percent from the fourth-quarter 2008.

The continued growth of online advertising expenditure comes at a time when the industry is expecting a decline of upto $900 million in the Australian advertising marketplace for 2009.

According to Paul Fisher, CEO of IAB Australia, in the face of the global financial crisis, reduced advertising and marketing budgets, more marketers and agencies across the spectrum of industry sectors continued and increased their investment in online advertising throughout 2009.
 
“Consumers are spending more of their time online interacting with content and advertising and it is this engagement that advertisers are increasingly aligning their brands with,” said Mr Fisher.

“With the proliferation of quality content online, the explosion of online video consumption and the development of new search and social networking tools and technology, the online advertising industry is fast becoming the medium of choice for marketers to influence consumers,” said Mr Fisher.

“In 2010, advanced standards and guidelines for online advertising, local research, and standardized online audience measurement will further accelerate investment in online advertising to surpass $2 billion this financial year and calendar year, increasing its share of the advertising market,” said Mr Fisher.

The general display advertising and search sectors both performed very strongly for the full year, with display advertising growing 7.2 percent and accounting for almost $500 million or 26.6 percent of the total expenditure for the 12 months, while search and directories advertising accounted for just short of $1 billion or 50.5 percent of total expenditure, and grew 22.9 percent year on year.  Classified advertising accounting for 22.9 percent of total expenditure for the year and experienced a slight decline of 2.3 percent year on year.

The finance sector continues to dominate the industry category expenditure, while the FMCG, retail and government sectors all reported strong growth in the 12 months to end December 2009.  Government expenditure is expected to continue to grow through 2010 with the Federal election slated later this year.  

Retail and FMCG expenditure is also expected to continue to grow through 2010 as agencies and marketers increase their investment in online.  Already there are clear signs of brand campaigns and expenditure being shifted online away from TV, newspapers, magazines and outdoor.

Within the general display email based advertising comprised $9.3m of advertising expenditure – up from $7.9 million in the previous quarter. Video based advertising increased its share of advertising expenditure from $4.7m to $5.3million for the same period. 

Little change was reported in the pricing methods for online advertising expenditure, with the Direct Response pricing method comprising 26 percent in General Display advertising and CPM 74 percent.

CPM pricing is based on a straight Cost per Thousand pricing methodology, sponsorship, or CPM-like
Pricing while direct response based pricing is based on a non-CPM display methodology. This may include any pay per click, pay per sale, pay per action or pay per lead.

The Q4 2009 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. 


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About the Interactive Advertising Bureau
The Interactive Advertising Bureau (IAB) is the peak trade association for online advertising in Australia. As one of over 25 IAB offices globally, and with a rapidly growing membership, IAB Australia’s principal objective is to increase the share of advertising and marketing dollars that interactive media captures in the marketplace. 

Officially launched in October 2005 by Australia’s six major online publishers - News Digital Media, Fairfax Digital, ninemsn, Yahoo!7, Google and Sensis Media Smart - together with the Australian Interactive Media Industry Association (AIMIA), the IAB has four objectives: 

• To develop, coordinate and promote industry standards and guidelines that make interactive advertising a simpler and more attractive medium for agencies, advertisers and marketers 
• To prove and promote the effectiveness of interactive advertising to advertisers, agencies, marketers, and the press 
• To be the primary advocate for the interactive marketing and advertising industry 
• To expand the breadth and depth of IAB membership while increasing direct value to members 

For further information about IAB Australia please visit: www.iabaustralia.com.au 

For more editorial information please contact:
Pru Quinlan or Ashleigh Favaloro
Einsteinz Communications
T: (02) 8905 0995
E: pru@einsteinz.com.au 
E: ashleigh@einsteinz.com.au

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