SYDNEY: Online adspend in Australia reached $1,731m for the quarter ending March 2016, representing a 33.5% year-on-year increase, new industry data have shown.

According to the latest IAB/PwC Online Advertising Expenditure Report, Australia's online market also saw 25% year-on-year growth for the calendar year 2015, while New Zealand recorded 31% growth over the same period.

That meant the Australian and New Zealand digital ad markets grew faster than both the US (+20%) and UK (+16%) last year, but from far lower bases, according to the report's calculations.

It added that mobile advertising in Australia is now close to reaching 50% of general display advertising, while video advertising accounted for more than 25% of the total.

In addition, the rates of growth in both mobile and video were also significantly higher in Australia last year than in the US and UK, though again from lower bases.

Mobile adspend reached $507.8m in the March quarter, and the report attributed 57% of mobile adspend to display and 43% to search.

Meanwhile, video display advertising accounted for a quarter (25.3%) of general display adspend over the first quarter of 2016, a similar rate as the same period last year.

In terms of brands, FMCG continued to lead video advertising and, along with motor vehicles and retail, represented close to half (46.5%) of the video display market. FMCG also accounted for a quarter (25.5%) of video display adspend.

Over the same period, motor vehicles and real estate spent the most in the general display market, increasing their share of expenditure from 28.5% to 31.2%.

Commenting on the findings, Megan Brownlow, PwC Executive Director, said: "After a busy Christmas retail season, the first quarter of the calendar year is usually quieter in adspend. Digital, however, still grew overall. This goes to show the central role and increasing regard in which digital is held by many marketers and agencies."

According to data from Warc's International Ad Forecast, which incorporates the IAB's research, internet became the largest ad channel in Australia in 2014. On the current trajectory, internet adspend should top A$6bn this year.

Data sourced from IAB, PwC; additional content by Warc staff