Classified Advertising shows highest growth as online advertising continues strong double-digit growth

SYDNEY, 24th November 2014: Product development and a focus on yield growth have seen Classified Advertising emerge as the highest growth category according to the latest Interactive Advertising Bureau (IAB) Online Advertising Expenditure Report for the quarter ending 30 September, 2014. Total online advertising expenditure for the quarter was $1.2 billion, a 16 percent year-on-year growth.

Classified advertising expenditure during the quarter was $238 million, an increase of 4.4 percent on the prior quarter and 22.8 percent year on year. In comparison to other markets, 20 percent of the total Australian digital expenditure went toward classifieds during the quarter, as opposed to 14 percent in the U.K. and six percent in the U.S.

"The growth of classified advertising is a great story for Australia, with our share of digital expenditure for classifieds far exceeding other markets," said Alice Manners, IAB Australia CEO. "Australia is certainly reaping the benefits from industry innovations in this sector and strong market players including REA and Carsales are delivering world leading results in their verticals. It's clear that marketers continue to have great confidence in the online advertising market."
The Report, which is compiled by PricewaterhouseCoopers (PwC) and is based on submissions from publishers and estimates of Google and Facebook, indicates strong growth was recorded across all segments compared to the same quarter in 2013, with Search up 10 percent and General Display recording a 22 percent increase.

Search and Directories expenditure was $580m during the quarter, representing 49 percent of online advertising expenditure, while General Display generated $362 million in the quarter and now represents 31 percent of the digital advertising market, its highest market share since 2006. Retail advertisers made up 10 percent of the General Display spend, signalling a willingness to continue their investment in digital.

Sept q gropwth

Growth across online advertising categories from September Quarter 2013.

Mobile advertising yet again saw dramatic growth, reaching $205 million for the quarter, up 85 percent year on year to reach 17.4 percent of the total online advertising market and 26 percent of general display – up from 22.5 percent from last quarter. Fifty-five percent of total mobile advertising expenditure was attributed to search, with 45 percent spent on general display. Device category shares for general display were 56 percent for smartphones and 44 percent for tablets, representing an increase in smartphones' share of mobile advertising over time.

Video advertising for September Quarter 2014 reached $62.3 million, an increase of 1.4 percent on the prior quarter and a year-on-year increase of 41.8 percent. It now accounts for over 17 percent of general display advertising expenditure during the quarter. FMCG advertisers were again the single biggest investors in online video advertising with 15 percent of total video revenue coming from this sector. Auto advertisers also increased their video spend to 12.7 percent, making them the second largest advertiser category for video.

mobileandVideoSept

Growth in market share of mobile and video since first quarter 2011.

Download the full report here.