Online Advertising

According to the Interactive Advertising Bureau Australia(IAB)'s Online Advertising Expenditure Report, online advertising in Australia has defied market conditions to reach beyond $1.7 billion in 2008. This represents an increase of $364.25 million (27% YOY). The expenditure for 4th-quarter 2008 amounted to $462 million, an increa of $83.25 million (22%) from 4th-quarter 2007 and $10.75 million (2.4%) from 3rd-quarter 2008. The $1.7 billion figure is set to continue rising to reach $2 billion, which may put it on a course to overtake newspaper or TV in 3 years.

• General Display - banner advertisements, affiliate marketing programmes, partnerships, sponsorships and emails
• Classifieds - ads placed to buy or sell a product or service
  
• Search & Directories - online directory and search engine listings

In the 2007-2011 Entertainment & Media Outlook webcast by PWC, industry leader Paul McNab predicts a double digit growth in the usage Internet in 2007 to 2011. He talks about 2006, where new revenue from the online environment eclipsed that of the physical environment, as a tipping point. In the webcast he also makes the following points:

1. Consumer is king

People are increasingly spending more time online with entertainment channels such as Facebook, and engaging in services like Google, and advertisers and producers of content likewise should respond to this phenomenon, which is predicted to continue in 2007 to 2011, because ad revenue would follow.

2. Home broadband will drive change

This growth should be supported by a broadband infrastructure that makes it available to homes, which will change how users interact with the Internet. There appears to be increasing political will for the expenditure necessary for a national roll-out, and the industry will flourish if that happens.

3. Need for insights

Online advertising may offer rich data to advertisers that allow them to assess whether their message has been tailored for the right audience.However, this data needs to then be taken further to form an insight in order to be useful for advertisers.

4. Hope for traditional media?

Out of home advertising, one of the oldest form of advertising, has seen a growth rate of 7% in 2006 and cracked the top 3 growth categories in advertising. This seems to send an optimistic message for traditional media.