SYDNEY: Australian online advertising expenditure hit A$7.9bn in 2017 with classifieds emerging as the fastest-growing format as the rate of growth slowed in the traditional engines of display and search.

According to the latest IAB/PwC Online Advertising Expenditure Report, overall online spending was up 7% last year, though this was a marked slowdown from the 23% rise recorded in 2016. 

Within the 2017 total, classified expenditure grew twice as fast as the headline rate, up 15.2% to $1.5bn. The IAB noted that the classifieds market in Australia – driven by real estate, automotive and recruitment – is very different to that in other countries: this category now represents nearly one in five digital ad dollars in Australia, but in the US it is only 4% of ad spend.

Search and display spending increased more slowly than in recent years, at 4.7% and 6.0% respectively, but they remain the biggest in monetary terms: search was valued at $3.6bn in 2017, while display stood at $2.8bn.

Mobile and video advertising continued to grow strongly, implying that the slower overall rate of online spending increase is a consequence of advertisers diverting money away from desktop. WARC estimates a 7.2% dip in desktop adspend last year, to $3.5bn.

Consequently, mobile accounted for the entirety of market growth in 2017, as spending rose 34.8% – or $796m – to hit $3.1bn. Of this total, 73% was attributed to smartphones and 27% to tablets, while the spend was split evenly between mobile search and mobile display. 

Video expenditure, meanwhile, jumped 43.0% to $1.1bn, “demonstrating a positive trend for publishers as brands seek premium environments in which to showcase their offerings”, the IAB said.

“Technology improvements enhancing publishers’ ability to sell and serve high quality, viewable rich content, along with growth in revenue for connected TV inventory, suggests this is a trend which should continue.”

Sourced from IAB Australia; additional content by WARC staff