Internet adspend hits record high in Australia

17 August 2010

SYDNEY: Online adspend has reached a record high in Australia over the last year, as brand owners put greater emphasis on using the medium as a tool to connect with consumers.

According to the IAB, the trade body, and consultancy PricewaterhouseCoopers, internet ad revenues surpassed A$2bn ($1.8bn; €1.4bn; £1.1bn) for the first time in a 12 month period over the year to June 2010.

Moreover, expenditure climbed to A$553m in the second quarter of this year, another comparative peak, thanks to an uptick of 22% year-on-year.

General display sales posted an increase of 11% during the year to June, equating to a share of 26.8% across the web as a whole.

The automotive industry contributed the most funds to display, accounting for 10.7% of category income, while FMCG, retail, insurance and health and beauty were among the fastest-growing sectors in this area.

In all, carmakers, financial services providers, IT firms and communications specialists were collectively the source for 44% of display budgets, down from 48% on an annual basis.

Classifieds enjoyed an improvement 9% and took 23% of total online sales, with recruitment being supplanted in top spot by real estate, followed by automotive in third.

Search and directories retained a dominant position overall, having secured 50.1% of marketers' outlay, and experienced an expansion of 16% in revenue terms.

Email advertising came in at a value of A$33.8m for the year and A$8.7m in Q2 2010, an increase on the figure of A$7.9m registered in Q1 2010.

Video ads generated returns of A$25.3m for the year and A$9.6m in Q2, a leap from just A$5.7m in the previous quarter.

Cost per thousand was the pre-eminent pricing method during the 12 months to June, and was employed by 75% of display campaigns, while direct response models made up the other 25%.

"Australian online advertising expenditure is on track to exceed $3bn in the next four years," Paul Fisher, ceo of the IAB, predicted.

Rising web consumption, the growth of social media and internet video, and enhanced audience measurement technology, would be the main drivers of this process, he added.

Data sourced from IAB; additional content by Warc staff