PwC IAB Digital Dollars Report June 2013

Executive Summary

Online advertising is an important part of the complex and highly dynamic economic ecosystem that enables the creation and delivery of a huge range of content and services to millions of people across Australia every day.

This report aims to promote a deeper understanding of the role of advertising in funding the internet, and by extension, fuelling the Australian economy and enriching our lives.

Online advertising is tightly intertwined with and supports many other important industry sectors such as ecommerce websites, software and hardware businesses, web design and hosting, web and mobile applications and the free ad-supported content and services utilised by Australians.

The ad-supported internet ecosystem in Australia plays a significant role in the economy. It provides substantial employment and contributes to growing the nation's wealth. Individual consumers, producers and the community at large derive significant benefits from the ecosystem.

Australia's ad-supported internet ecosystem generates significant economic activity, contributing $17.1 billion directly to economic output (GDP) and providing over 162,000 jobs. Its GDP contribution is forecast to reach $26.5 billion by 2017, with an average annual growth rate of 7.5 per cent, outpacing other sectors of the economy.

Online advertising is the primary funding model that supports many things Australians use the internet for on a daily basis - at no cost (free) or low cost. Access to these online services and content generates additional welfare benefits worth approximately $70 billion on top of its contribution to economic output and jobs.

  • Consumer value―$43 billion in benefits from decreased transaction costs, ability to find products that better match preferences and availability of new products and services.
  • Producer value―$27 billion in benefits from decreased production and research and development (R&D) costs, ability to find new markets and improved information flows.
  • Community value―substantial qualitative benefits from the strengthening of communities and access to information (difficult to quantify).

Small and medium enterprises (SMEs) are strong and increasing users of the ad-supported ecosystem, using it to improve the efficiency and effectiveness of communication with consumers, driving down input costs and growing revenue. A recent survey by Sensis found 82 per cent of SMEs use the internet to research information and to look for suppliers, 71 per cent use it to order and 73 per cent use it to pay for products and services. Industry sectors where internet will have a transformative impact are predicted to grow the most in terms of contribution to GDP.

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