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Traditional Media the Loser

21 Oct 2009

The online ad industry is set to take away over a billion dollars from traditional media over the next four years.


Australia's online advertising market has again beaten advertising market trends, recording continued strong, double digit growth year on year of 18.5 percent for the full financial year according to figures released by the Interactive Advertising Bureau (IAB) Australia in its Online Advertising Expenditure Report (OAER). The Report, compiled by PricewaterhouseCoopers (PwC), showed that online advertising expenditure in Australia for the financial year ending June 30 2009 exceeded $1.8 billion and totalled $453 million for second-quarter 2009 (three months ended 30 June 2009).


For the full financial year, Search and Directories accounted for 49 per cent of the total advertising expenditure, while General Display accounted for 27 percent and Classifieds 24 per cent. Search and directories grew 25 per cent for the full financial year; general display grew 19.6 per cent and classifieds 6 per cent.


"Given the challenges of the past eight months since the GFC impacted on the Australian media economy, any growth is welcome," said Paul Fisher, CEO of IAB Australia. "The latest revenue figures demonstrate the continued confidence marketers and agencies have in online as an advertising medium both when times are good and when times are tough.


"Search continues to drive the growth in the industry, with display advertising also well supported. Unsurprisingly, online classifieds advertising has been impacted by declines in the employment, real estate and automotive markets. "


Fisher went on to say, "The continued growth of online advertising expenditure coupled with anecdotal increases in online advertising activity already this quarter, position the industry strongly. With the economy showing early signs of recovery, the online industry is well on track to exceed $2 billion in calendar 2009."


Speaking last week at the fifth annual Australian Interactive Media Industry Association (AIMIA) Digital Media Summit in Sydney, Fisher said digital media's share of the overall ad pie will grow by about two percentage points a year until 2013 to be worth $3.75bn, or 23 per cent of advertisers' total media budgets, as reported in B&T Today.


Fisher said, "In Australia, online advertising is still an emerging industry that is in the growth phase. That growth of 40 per cent, 50 per cent, 60 per cent is tapering out to be about 20 per cent to 25 per cent. But to be tapering out to those kinds of figures is pretty astounding."


Fisher added that about a billion dollars, a large portion of the growth, would migrate from traditional media including television in to online channels over the next four years and that online search will be a focus of many brands in the future, with the sector likely to grow from 50 per cent ($900m) to 60 per cent of total online spend in the next two to five years.



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