Online advertising in Australia is rapidly heading toward a $2 billion per annum enterprise, cementing itself as the number three advertising medium after newspapers and television.
PricewaterhouseCoopers has released figures showing that advertisers spent $1.87 billion online in Australia in 2008/09, up 9.4% on the previous financial year. This figure is expected to break through the $2 billion mark this financial year.
The growth of online in the final quarter of 2008/09 (almost 11%) was against the tide of general advertising and a stunning result for the digital sector. Sydney Morning Herald (‘SMH’) Marketing Editor, Julian Lee, reports that “In the main media advertising industry, up to $900 million is estimated to have been wiped off as a result of budget cuts”.
SMH quotes the chief executive of Interactive Advertising Bureau, Paul Fisher as saying "Advertisers spent $161 million more on online [in 2008/09] than they did in the previous year, and that's something, given what happened [as a result of broader cuts in the advertising sector]."
Fisher also said that the search advertising category, dominated by Google, would continue to dominate. Last year it grew 17% and accounted for just over half of all dollars spent online. He also said that video-based ads were showing "spectacular growth", though from a low base of about $20 million.
In relation to video ads, SMH also quotes Jack Matthews, chief executive of Fairfax Digital, who said that video advertising - usually 15-second spots screened before a video news report - were growing in volume and delivering the company high yields, but supply was struggling to meet demand.
"It's an industry issue but basically we need to be producing more inventory. There's not enough video content out there", said Matthews.
Yvette Mayer, national digital director at the media agency Starcom, was more cautious in her assessment of current online trading conditions.
She told SMH, "We are seeing early signs of recovery. Strong might be too strong a word and there is some bounce back in some of the big areas, in particular finance and automotive."
She estimated that the market might grow 15% this year, effectively taking the digital pie to just over $2.1 billion.
As the digital market becomes more mature and sophisticated, digital advertising has become the most tangible form of monetising the internet. The combination of banner, video and search engine adverts is a powerful new tool for brands and the online spend will continue to grow at a rapid rate as more becomes known about its effectiveness and rate of return. Digital is indeed the new advertising frontier.