Australian Online Advertising Spend Hits Record $601M For Q1

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IAB Australia report shows online advertising expenditure has hit a record high of $601M for Q1 2011. With online video advertising experiencing strong growth.

According to the Online Advertising Expenditure Report (OAER) compiled by PricewaterhouseCoopers (PwC), released by the Interactive Advertising Bureau (IAB), the Australian online advertising market has continued its strong upward trend, with online advertising expenditure for the March quarter 2011 growing 17 % year-on-year. The data, revealed that online expenditure for the first three months of 2011 totalled $601 million – the largest ever recorded for Q1.

According to Paul Fisher, CEO of IAB Australia, whilst online advertising continues its march towards $3 billion this growth includes a small and most likely temporary shift away from general display into search.

Both search and directories and classifieds achieved a record Q1 performance, with search and directories recording 23% growth year-on-year, compared to the general display market which grew only achieved a three percent growth for the same period.

The breakdown of overall online advertising expenditure for Q1 (as per the report) is as follows:

• Search and directories – 54.2% (representing $326 million)
• Classified – 24.2% ($145million)
• Display Advertising – 21.6% ($129million)

The finance, motor vehicles, computers and communications sectors continued as the dominant users of general display advertising during the quarter, representing 38.79% of general display spending.  The finance industry spend was down 20% from Q1 in 2010, to represent 15.39% of general display advertising expenditure for the quarter.

Real estate recorded the biggest growth in display advertising doubling year-on-year to reach 9.1% and was also the leading category for classifieds advertising expenditure during the quarter, followed by recruitment and automotive.

“Cyclically Q1 is always a cautious quarter from media agencies and their clients and down on Q4.  We expect continued double digit growth in search and directories, classifieds and a return to double digit growth for general display in Q2 and it’s encouraging to see the strong growth in the display expenditure in the real estate, retail and health, beauty and pharmaceuticals industry categories.”

“Online video advertising continues to grow strongly, up 47% on Q1 2010 which reflects the continued adoption of this format by advertisers looking to enhance or replace their TV schedules,” concluded Fisher.

Video based advertising maintained strong growth recording $8.44 million for the first quarter, up from $5.7 million in Q1 2010.  Email based advertising comprised $8.52million for the quarter, a slight increase from $7.9million in the corresponding quarter in 2010.

The full 2011 IAB Online Advertising Expenditure Report is made available to IAB Australia members only.

Article by Nirosha Methananda

Nirosha is a Content Creator for The Media Pad, publisher of Power Marketer. Coming from a marketing and communications background (in the legal, retail and online industries), she has a strong passion and enjoys the innovation, creativity and problem-solving that are core to this area of business. Recently engaged, Nirosha is immersing herself in the joys of wedding planning! She is also an avid reader (of mostly fiction), always keen to get onto the golf course, likes to paint, tries to sing and is able to recall useless celebrity facts at the drop of a hat!

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