Online advertising maintains strong growth to reach $3.6bn – digital revenue overtakes FTA TV

Online advertising expenditure in Australia reached $3.6bn for the financial year ending 30th June 2012, an increase of 14.6 percent on the preceding year according to IAB Australia’s Online Advertising Expenditure Report (OAER) which was released today.

The Report, which is compiled by PricewaterhouseCoopers (PwC), noted double digital growth in all three categories but mobile outpaced all other formats achieving 190 percent growth year-on-year to June 30 2013. Search and Directories grew 18 percent year-on-year, while General Display grew 12 percent and Classifieds grew 10 percent.

Total online advertising expenditure for the six months ended 30 June 2013 was $1,882.6m. This is the first time since the start of data collection in 2002 that online advertising revenue has exceeded advertising revenue for free to air television, which was $1,805.4m for the six months ended 30 June 2013.

Internet advertising revenues in Australia totalled $971.9m in the quarter ending June 30th 2013, an increase of 15.7 percent from the $840.0m in June quarter 2012 and a 6.7 percent increase from $910.8m in March quarter 2013.  Mobile advertising revenues reached $45.9m for the June quarter 2013, of which 58 percent was tablet based.  Video display advertising grew 56 percent year on year for the June quarter, recording $35.7m in the quarter ending June 2013.

The auto sector showed it is rapidly embracing digital display, with motor vehicles the highest spending advertiser industry category in the quarter ending June 30 2013 at 19 percent share – an increase from 14.7 percent in the previous quarter. 

Gai Le Roy, Director of Research for IAB Australia commented: “Achieving $3.6b in online advertising revenue in a challenging advertising environment is a great result for the industry and the double digital growth in each of the three digital advertising sectors is exceptional.  As expected mobile advertising was the star performer as advertisers move their budgets to start matching consumer behaviour and video advertising growth continues to impress as marketers target the 13m Australians streaming video content each month.”

General display advertising accounted for 27.3 percent of all online advertising, classifieds advertising accounted for 18.9 percent and search and directories advertising accounted for 53.8 percent based on expenditure for the June quarter.  This equates to a total expenditure for each category during the June quarter of $523m for search and directories; $183.3m for classifieds; and $265.6m for display advertising.

The report is the fifth to be prepared under the ‘new approach’ introduced in the June 2012 report.  This approach means data collected from industry participants has been supplemented by estimates for Google display, video and mobile advertising as well as Facebook display and mobile advertising; while the prior methodology for estimating Google search has been refined.