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Online Number One Ad Spend for 2014

05 Aug 2010

Online is set to become the largest media sector in terms of ad spend by 2014, hitting $3.9bn, according to a PriceWaterhouseCoopers forecast.

As reported in B&T, the analysts' Entertainment and Media Outlook 2010-2014 revealed after slowed growth in 2009 of 1.1 per cent, Australia's entertainment and media industry, combining advertising and consumer spend, is set to grow at an annual rate of 5.1 per cent from this year to be worth $30.2bn and growing to $36.2bn by 2014.

Ad spend will account for $11.6bn of the total investment this year and $14.2bn in 2014, an annual growth rate of 5.3 per cent. Online spend will dominate, with consumer spend predicted to grow 12.4 per cent this year to $5.8bn and ad spend surpassing the $2bn mark, a predicted increase of 17 per cent this year. By 2014, online ad spend will slow slightly to 13.9 per cent to $3.9bn to become the biggest slice of the marketing pie, ahead of FTA TV at $3.8bn. Overall the online sector will be worth about $8bn this year, $10.6bn in 2014.

The report noted that consumer spend currently outweighs ad spend across the media/entertainment industry overall, with consumer spend expected to grow 4.9 per cent annually to reach $22bn by 2014, while ad spend will reach $14.2bn in five years time.

Interactive games, subscription TV and filmed entertainment were also cited as strong growth sectors over the next five years, with investment in free-to-air television, radio and newspapers feeling the pressure from consumers and advertisers.

Newspapers and FTA TV may have dominated online ad spend in 2009 at $3.5bn and $3.2bn respectively, as well as this year, but will see growth rates slow over the next five years as spend moves towards filmed entertainment and the internet in particular.

Newspaper spend was down 15.7 per cent to $3.5bn in 2009 but is set to rise to 3.5 per cent growth this year to $3.6bn and then to $3.8bn by 2014. Ad spend for FTA TV was down 7.6 per cent to $3.2bn in 2009 but is said to rise to $3.4bn this year, a growth of 6.8 per cent before slowing to 2.7 per cent , to $3.8bn in the next five years. In comparison, ad investment in filmed entertainment will grow 3.8 per cent to $106m in 2014, with spend up 4 per cent to $407m for the pay TV sector in five years time.

David Wiadrowski, head of technology, information, communications and entertainment at PricewaterhouseCoopers, said: "Consumers are the secret to success for individual businesses and the sector as a whole. Entertainment is what consumers want and businesses who can deliver that will grow successfully in the future. The National Broadband Network should be an enabler for businesses to empower consumers through greater choice and more competitive broadband prices."

Source: B&T


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