SYDNEY: Online advertising expenditure will continue to rise in Australia this year, with consumer goods manufacturers and retailers likely to be among the main drivers of this process.

The IAB, the industry body, reported that internet adspend jumped by 17% year-on-year in the first quarter of 2010 to A$512.5m ($464m; €358m; £309m).

While this figure was largely flat compared with Q4 2009, the IAB predicted that totals for the current financial year should rise to A$2bn from the level of A$1.5bn registered over the previous 12 months.

Search and directories enjoyed an uptick of 2% to A$264.8m in the first quarter of 2010 compared with the fourth quarter of 2009, and took a 51.7% share of online advertising budgets in Q1 as a result.

Classified advertising experienced an improvement of 9.4% to A$121.8m during the same timeframe, and was thus responsible for 23.8% of the medium's advertising revenues overall.

Display retained 24.6% of the market, or A$126m, with video ad sales growing from A$5.3m to A$5.7m quarter-on-quarter, during which time general display posted a contraction of 11.1%.

Elsewhere, e-mail advertising recorded a decline from A$9.3m in Q4 2009 to A$7.9m Q1 2010, according to the IAB's estimates.

Brands in the financial services, automotive, IT and communications sectors made the greatest use of display in Q1 2010, contributing 45.6% of all category spending from January to March this year.

"Retail and FMCG advertisers and government continue to grow their share of the online general display market, foreshadowing significant shifts to online away from other media," Paul Fisher, the ceo of IAB Australia, added.

"Driven by increasing consumer engagement with online content and advertising, this fundamental shift across the marketing and advertising industry underpins the continued double digit growth in online advertising expenditure."

Data sourced from B&T; additional content by Warc staff