SYDNEY: Total online adspend rose by 9.4% in Australia last year to reach A$1.87bn ($1.69bn; €1.23bn), according to data compiled by PricewaterhouseCoopers on behalf of the Interactive Advertising Bureau.

Paul Fisher, ceo of the industry body, said the increase highlighted firms' willingness to invest in online over traditional media, reflecting changing preferences among consumers.

"We didn't flatten out or go backwards," he said. "Companies are realising that even though they've trimmed budgets, they still have to invest in online."

Last year's spending increase is well below that of previous years, with the global economic slowdown putting pressure on corporate marketing budgets.

In 2008, online spend rose by 27%, following 2007's 34.5% increase. Earlier forecasts had also predicted last year's spend would top A$2bn.

Contained within the 2009 IAB figures is a 17% increase in the search and directories market, and a 7.1% rise for display ads.

Online classifieds performed worst, with total spend falling by 2.3% compared with 2008.

More broadly, traditional media suffered during 2009, with free-to-air television adspend down 7.9% and newspapers falling by 17%.

Fisher added: "The trend we are seeing is that market departments are still continuing to invest in online even when they are pulling out of traditional markets.

"We've really got world leading online creative in this country, and it's definitely showing up online, and more brand advertisers are realising they can do some really great things on the internet."

Meanwhile, Yvette Mayer, national digital director at media agency Starcom, said she was cautious about the industry's prospects for growth.

"We are seeing early signs of recovery - strong might be too strong a word and there's some bounceback in some of the big areas, in particular finance and automotive," she commented.

Data sourced from Smart Company/Sydney Morning Herald; additional content by Warc staff