Online Advertising cracks $2billion mark with 13 percent year on year growth

Posted by IAB Australia On August 16, 2010 Media Releases

16 August, 2010: The Australian online advertising market has broken through the $2 billion barrier with online advertising expenditure data released today in IAB Australia’s Online Advertising Expenditure Report (OAER) compiled by PricewaterhouseCoopers (PwC) noting a total expenditure of $2.043 billion for the 12 months ended 30 June 2010. The report also showed online advertising expenditure totalled $552.5m in Q2 2010, a record quarter and a 22 percent year-on-year increase from Q2 2009.

All three sectors of the market experienced growth in the 12 months ending 30 June 2010, with general display advertising increasing 11 percent, classifieds increasing nine percent; and search and directories advertising increasing 16 percent.   For the full year general display advertising accounted for 26.8 percent of total expenditure while classifieds advertising accounted for 23.0 percent and search and directories advertising accounted for 50.2 percent.

Commenting on the Report, Paul Fisher, CEO of IAB Australia, said “The long awaited and much forecast $2 billion dollar mark has finally been breached.  Powered by strong growth in all three categories and with continued double digit growth forecast, Australian online advertising expenditure is on track to exceed $3billion in the next four years. 

“With increased online consumption, explosive growth in the use of social media and online video content and advertising; and improved online audience measurement, advertisers and media agencies continue to grow their advertising investment where they get the best results – online,” said Mr Fisher. 

Finance, motor vehicles, computers and communications sectors continue to be the dominant users of general display advertising, accounting for 44 percent of the category – down from 48 percent in the previous year.   Motor vehicle manufacturers have remained the single largest spender for the year, responsible for 10.7 per cent of general display advertising expenditure.  FMCG, retail, health and beauty and insurance were the fastest growing industry sectors.

Email based advertising reach $33.8m during the 12 months to 30th June and $8.7 million in Q2 2010 – an increase from $7.9 million recorded in Q1 2010.  Video based advertising comprised $25.3m of advertising expenditure for the 12 months to 30th June and $9.6 million in Q2 2010 – a significant jump from $5.7 million in Q1 2010.  

The dominant pricing method continues to be Cost per Thousand (CPM), with 75 per cent of general display advertising based on CPM while direct response accounts for just 25 per cent for the full year ended 30 June 2010 – and across the last two quarters.  

Year on year comparative data is not yet available for email or video based advertising, nor the pricing model breakdown. 

Real estate was the leading category for classifieds advertising expenditure in the 12 months ended 30 June 2010 followed by recruitment then automotive. This reflects the current quarter results but is a change from the preceding year when recruitment dominated the sector, followed by real estate and then automotive.

The 2010 IAB Online Advertising Expenditure Report covers more than 1,000 websites.  An executive summary of the Report is available on the IAB Australia website. The full report is made available to IAB Australia members only. 


About the Interactive Advertising Bureau
The Interactive Advertising Bureau (IAB) is the peak trade association for online advertising in Australia. As one of over 25 IAB offices globally, and with a rapidly growing membership, IAB Australia’s principal objective is to increase the share of advertising and marketing dollars that interactive media captures in the marketplace. 

Officially launched in October 2005 by Australia’s six major online publishers – News Digital Media, Fairfax Digital, ninemsn, Yahoo!7, Google and Sensis Media Smart – together with the Australian Interactive Media Industry Association (AIMIA), the IAB has four objectives: 

• To develop, coordinate and promote industry standards and guidelines that make interactive advertising a simpler and more attractive medium for agencies, advertisers and marketers 
• To prove and promote the effectiveness of interactive advertising to advertisers, agencies, marketers, and the press 
• To be the primary advocate for the interactive marketing and advertising industry 
• To expand the breadth and depth of IAB membership while increasing direct value to members 

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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.