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

Why it's time to integrate your website into your digital marketing strategy

As the head of marketing, do small beads of perspiration break out on your forehead when you hear the dreaded phrase: “It’s time to redesign our website?”

The impact of uniforms on consumer brand preferences

Flight attendant uniforms attract attention. From a primary association with sex appeal during the 1960-70s, to the diverse role they perform today, the flight attendant’s uniform sits front and centre in the advertising imagery of many airlines. However, relatively little is known about the ways in which consumer behaviour is influenced by airline uniforms.

Are data and creativity like chalk and cheese?

The industry is experiencing an explosion in data-led initiatives like programmatic buying, as well as a simultaneous increase in the importance of creativity. A less adventurous marketer might see these trends as chalk and cheese, as two developments which have the power to markedly improve a brand’s bottom line, but which don’t have much room for crossover.

When you want to get the most ROI, researching about the tools you need will pay off big time. Take for example your marketing and repor...

TapAnalytics

​How to get the best ROI from your martech investment

Read more

We can see how companies are now developing and improving the digital marketing platform they are using and finding ways to add more feat...

TapAnalytics

CMO's top 10 martech stories for the week - 21 January

Read more

Very nice article, Thanks for sharing this necessary information about digital trends. Specially i like prediction no 3 " Marketers embra...

kevin marshall

Predictions: 16 digital marketing trends for 2016

Read more

Mobile has indeed becoming a big player in the marketing industry. It should be utilized by businesses and mobile campaigns should be pro...

TapAnalytics

Report: Mobile-based campaigns and coupons boost consumer brand sentiment

Read more

Very good points, thanks for this article :) I would also add Virtual Reality to the game changers in 2016 (especially after CES2016). I...

Piotr Maksymowicz

Predictions: 16 digital marketing trends for 2016

Read more

Latest Podcast

More podcasts

Sign in