Australia's online advertising spend outgrows traditional media channels

New Frost and Sullivan finds digital advertising expenditure hit $3.74bn in 2013, up 16%, and is expected to continue outperfoming other channels between now and 2018

Australia’s online advertising market represented more than a quarter of total advertising expenditure in 2013 and outperformed all other media channels for the year despite experiencing slower growth.

Frost and Sullivan’s new The Australian Online Advertising Market: Year End Review and Market Outlook report found the country’s online advertising market grew 16 per cent in 2013 to $3.74 billion in revenue, or 27 per cent of total advertising spend. Total advertising spend for last year hit $13.9bn.

Digital advertising was the strongest performer across all types of channels, outpacing traditional media such as print, TV, outdoor and radio, although the pace of growth has slowed over the past decade. For instance, from June 2011 to June 2012 online advertising grew at a rate of 20 per cent, whereas from June 2012 to June 2013 it dropped by 4 per cent.

The leading online advertising segment was search advertising, which increased 23 per cent in 2013, followed by online general advertising, which rose 12 per cent. Online classifieds chalked up 11 per cent growth, while online directories grew by 4 per cent. Search is expected to continue to outperform the other three major online segments between now and 2018, Frost and Sullivan stated.

Not surprisingly, the fastest growing segments in the Australian online advertising market are mobile and online video, and both are expected to outperform the market significantly over the next five years. Mobile advertising, for example, is forecast to grow at a Compound Annual Growth Rate ( (CAGR) of 39 per cent between 2013 and 2018, while video advertising is expected to grow at 31 per cent.

By that time, the research group claims 70 per cent of overall advertising served on mobile devices will be to tablets. The prediction echoes the last quarterly online advertising expenditure report from the Interactive Advertising Bureau (IAB), which showed tablets representing just under half of the mobile device category.

Frost and Sullivan also noted Australia’s total advertising market is experiencing slower than average growth in 2013, a reflection of the overall below par growth of the local economy.

Given the short-term economic outlook for Australia is still uncertain, Frost and Sullivan said it expects overall advertising expenditure in FY2014 to remain relatively flat, and offered up a CAGR prediction of 2.8 per cent between 2013 and 2018 to $16bn.

“Online advertising expenditure is forecast to significantly outperform the more mature offline advertising channels [free-to-air TV, pay TV, radio, magazines, outdoor, cinema and print directories] over the next five years, with a CAGR of 12 per cent, increasing to $6.59 billion, its proportion accounting for 41 per cent of the total advertising market in 2018,” senior research manager, Australia and New Zealand ICT practice, Phil Harpur, commented.

“Strong increases in spending intentions for 2014 are predicted by advertisers across all online general advertising products, in particular for online display and email campaigns.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, or join us on Facebook: https://www.facebook.com/CMOAustralia

Signup to CMO’s new email newsletter to receive your weekly dose of targeted content for the modern marketing chief.

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Supporting Association

Blog Posts

Tapping behavioural science for consumer influence

We know full well the business we’re in as marketers is really the business of choice. But recent discoveries from behavioural science are leading to a psychological revolution that challenges many of the accepted models of how communication, creativity and advertising influence a consumer’s preferences.

Kyle Ross

Account director, TRP

10 ways of changing your culture through self-awareness

Did you hear about the manager who always shot the messenger whenever they brought bad news? He eventually stopped hearing bad news. Unfortunately for him, this wasn’t because there was none to report.

Steve Glaveski

Co-founder, Collective Campus

How to create a compelling customer experience vision

Organisations are seeking new ways to engage customers, drive new sales and increase customer satisfaction by providing engaging customer experiences. A customer experience initiative that lacks a strong, clear vision often fails to achieve its intended result.

Olive Huang

Research director, Gartner

There are lots of feature of microsoft dynamics crm by using these features you can grow your businesses. Some of them is lead management...

Dynamics Square

How Port Container Services is finetuning lead management with CRM

Read more

Agreed. I see the opposite problem quite often where people are tasked in an organisation just with "be creative" - thus offering no boun...

Dr Fiona Kerr

The great debate: Is data killing creativity?

Read more

By far, this is the best article I've come across so far that has a relevant information regarding the future of marketing. Although the ...

Jayden Chu

​Six ways to prepare for the future of digital marketing

Read more

These are some good ideas. You didn't touch on the overarching goals and results of brand loyalty. This article does a good job at provid...

hgsupport

Four ways to use social media to boost customer loyalty

Read more

This read like a PR PLUG for the agency. Very flowery language for the agency and very little details about the deal or the project.

Digital_Marketer

Why Tourism Victoria decided to go agile

Read more

Latest Podcast

More podcasts

Sign in