Mobile ad revenues to rise in Australia

14 October 2010

SYDNEY: Online video and mobile are set to be among the main drivers of digital advertising growth in Australia during the next five years, a report has argued.

Research firm Frost & Sullivan estimated the country's online ad sector (not including search, directories and classified) will grow by 11%, to A$568m ($562m; €402m, £355m), in 2010.

Having interviewed 30 publishers, advertising network brokers and media agencies, and surveyed 240 senior client-side executives, Frost & Sullivan stated performance-based advertising was perceived as an "easy sell" in the downturn.

However, the easing of economic pressures should now result in a return to campaigns utilising cost-per-thousand models.

Boosted by improved technology and graphics, alongside faster broadband speeds, internet video ads are also delivering strong growth, albeit from a low base.

Less favourably, while available inventory in this area is often selling out quickly, further expansion is being constrained by a lack of access to connections offering high bandwidth.

Overall, 52% of respondents intended to heighten their online ad budgets in 2011, and 38% outlined similar plans concerning search.

With the use of smartphones yet to reach critical mass in Australia, mobile marketing remains at an early stage.

Total revenues in this category, excluding outlay on apps and Bluetooth services, reached A$9.1m in 2010, representing an annual increase of approximately 18%.

Frost & Sullivan anticipates mobile advertising expenditure will come in at $76m by 2015, growing at 46% a year.

Social networking is also increasingly being viewed as a long-term strategic imperative by brand owners.

The poll revealed that 53% of Australian companies had already integrated social media applications into digital advertising efforts during the past 12 months.

Popular activities included adding options to share corporate email content on portals like Facebook and Twitter, and giving netizens the opportunity to join official mailing lists via these platforms.

Frost & Sullivan forecast general online advertising spend would post a compound annual growth rate of 9.1%, to A$877m, in 2015.

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