Online Advertising Cracks $1 billion Ceiling

Posted by IAB Australia On February 12, 2007 Media Releases

12 February, 2007: Online advertising has broken through the $1 billion barrier in Australia, reporting industry growth of 61.5 percent over the twelve months to 30 December 2006, reaching $1,001,000,000 according to figures released today by the Audit Bureau of Verification Service (ABVS).

Computers and Communications advertising topped the industry categories at 20.3 percent market share in Q4, knocking finance from its usual lead position, however Home Products and Services recorded the largest growth at 404 percent, followed by Government at 97 percent growth.

Over the twelve months, Office and Business Equipment was the fastest growing category at 238 percent, followed by alcoholic beverages at 184 percent. IAB Australia General Manager, Patty Keegan, said: “Now that the $1 billion mark has been broached we expect to see 2007 figures soar. It’s clear that traditionally strong online advertising sectors such as finance and motor vehicles will continue to grow, but we’re also seeing strong spends in unexpected sectors such as home products and government, which bodes well for the future.

“The peaks through the year for each industry sector clearly show the close ties between the immediacy of online advertising and sporting or cultural activities. For example we believe the market surge around alcoholic beverages was driven by the significant sporting events of 2006, such as World Cup, Cricket and the Commonwealth Games; while the Q4 surge in computers and communication was driven by Christmas related activity for home electronic devices,” said Ms Keegan.

Each of the three categories grew during the quarter and year on year, with Search & Directory leading the growth for the last quarter at 31.3 percent and 81.4 percent year on year so that it held 39.9 percent share of the overall online market for 2006.

Classifieds and Display advertising also continued to grow strongly with 45.1% and 56.2% calendar year on year growth respectively. Classifieds accounted for 29.9% of online advertising spend and Display advertising for 30.2% during 2006.

The sustained growth in Search and Directory during 2006 has been driven by the broadening of the advertiser base with many new businesses trying search for the first time – including many small businesses, however big brand advertisers have also begun to pay more attention to Search’s role within their overall offline and online media mix.

Overall total online expenditure for the fourth quarter of 2006 was $317 million.

IAB Australia

IAB Australia is the peak trade association for online advertising in Australia. As one of over 43 IAB offices globally and with a rapidly growing membership, the role of the IAB is to support sustainable and diverse investment in digital advertising across all platforms in Australia.