Digital adspend to rise in Australia

11 October 2011

SYDNEY: Mobile, online video and social media advertising spend is set to rise in Australia during the next five years, according to a new forecast.

Frost & Sullivan, the insights provider, interviewed executives representing 240 advertisers and 30 publishing companies, and, as a result, estimated internet display revenues rose by 11.9% in the 12 months to June, achieving a value of A$635m.

Just over half of the organisations featured in the analysis boosted their outlay in 2010, with large firms, and operators in the FMCG, financial, insurance and retail sectors among those posting the biggest improvements.

Looking ahead, Frost & Sullivan predicted the display category would see a "marked change" in the next five years, as demand for email newsletters, traditional banners, sponsorship and advertorials declines.

As such, the primary drivers of future growth, helping the display market reach a projected A$1.1bn by 2016, are likely to be online video and rich media.

Major publishers including NineMSN, Fairfax Media, Yahoo!7 and News Digital Media are expected to retain a leading role overall.

Social media is also due to enhance its position, although these sites currently account for a modest 7% of display budgets, with Facebook alone taking 6%.

YouTube, the video-sharing platform owned by Google, receives another 4% of display revenues, a figure which may increase going forward.

Turning to mobile, Frost & Sullivan reported that display adspend rose by 26% in the year to June, to a net worth of A$13.9m. Some 60% of corporations polled also plan to raise their outlay through this channel in 2012.

Frost & Sullivan pegged the medium's income at A$82m in 2016, and predicted 2013/14 would be a tipping point in interest for brands, encouraged by localised sites, better rich media ad serving tools and the consolidation of operating systems.

Phil Harpur, Frost & Sullivan's senior research manager, ICT, said: "We anticipate rapid growth as mobile advertising, driven by further adoption of smartphones and strong growth in tablet PCs, gains more acceptance amongst advertising agencies as a crucial part of the overall advertising mix."

Data sourced from Frost & Sullivan; additional content by Warc staff