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Online Advertising to Bounce Back Big Time

29 Sep 2009

Digital media executives anticipate a significant escalation in online advertising supported by a new report predicting that Australia's $500 million online display advertising market will more than double over the next five years.


Multinational researcher Frost&Sullivan, predicts average growth of 19 per cent a year for the next five years to $1.2 billion by 2014, as reported in The Australian.


The report says the advertising slowdown will affect the online display market later than other sectors, with growth falling to 17 per cent in the financial year from 19 per cent in the year to June.


The report says the dip will be short-lived, and growth will be back to 19 per cent in the 2011 financial year.


The report, which does not include search and directories advertising or online classifieds, says the share of major publishers -- Ninemsn, Fairfax Digital, Yahoo7, News Digital Media and Sensis -- is continuing to decline, while that of independent publishers and advertising networks is increasing. The major publishers had, however, had "weathered the economic downturn relatively unscathed".


"The established base of premium sites has been a large contributor to this segment's ability to remain in the forefront of advertisers' minds," the report says.


The top five publishers lost two share points in the past year, falling from 63 per cent of the market to 61 per cent.


Ninemsn was still the leader with 19 per cent, followed by Fairfax with 15 per cent. NDM, Yahoo7 and Sensis each have less than 10 per cent, according to Frost & Sullivan's estimates.


Online video ads are expected to show the most growth in the next five years, increasing their share from about 4 per cent last year to 14per cent of the total in 2014, which equates to annual average revenue growth of 48 per cent.


Performance advertising, which is sold per-click or per-action rather than on audience reach, is tipped to grow by 25 per cent over the period, with integrated site content tipped to have the same rate of growth.


This year, despite the advertising downturn, email newsletters and online video both grew. The proportion of advertisers surveyed who used e-newletters jumped from 39 per cent last year to 49 per cent, while online video use increased from 17 per cent last year to 25 per cent.


One in five advertisers (21 per cent) said they had cut their online advertising budget, while 40 per cent said they had increased it and 37 per cent said it was unchanged. Next year 26 per cent plan to boost online spending, while 15 per cent are planning cuts.


"This indicates overall greater stability in spending per organisation, with a much higher proportion of companies now maintaining or decreasing budgets," the report states.


According to The Australian the report covered more than 200 advertisers and more than 30 publishers and media buyers were interviewed.



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