Classifieds, general display show strong growth in latest IAB online advertising report

Classified advertising's percentage of total digital advertising spend in Australia proves substantially higher than in the US or UK

Australia’s classified advertising spend has jumped 22.8 per cent year-on-year and now represents a substantially higher percentage of digital expenditure here than in other countries, the IAB’s latest online advertising report claims.

According to the Interactive Advertising Bureau Australia’s Online Advertising Expenditure Report for the three months to 30 September 2014, classified advertising was worth $238 million in Q3, up 4.4 per cent on Q2 and 22.8 per cent year-on-year. This represented 20 per cent of total digital expenditure over the quarter.

In comparison, classified advertising made up 14 per cent of the UK’s total digital advertising spend, and 6 per cent in the US.

IAB CEO, Alice Manners, saw this as a positive story for Australia’s digital advertising industry. “Australia is certainly reaping the benefits from industry innovations in this sector and strong market players including REA and Carsales are delivering world-leading results in their verticals,” she commented.

“It’s clear that marketers continue to have great confidence in the online advertising market.” In total, online advertising expenditure for the quarter reached $1.2 billion, representing 16 per cent year-on-year growth. All types of advertising experienced year-on-year growth, with search up 10 per cent and general display continuing its renaissance, rising by 22 per cent to 31 per cent marketshare. This was the highest result for general display since 2006.

With retail advertisers making up 10 per cent of general display spend, the IAB said the growth signalled a willingness to continue their investments in digital.

Search and directories expenditure accounted for 49 per cent of online advertising for the quarter, or $580 million.

Mobile advertising was again a stellar performer, growing 85 per cent year-on-year to reach 17.4 per cent of the online advertising market. Of this, 55 per cent was attributed to search, and 45 per cent on general display.

Video advertising also grew, albeit on a slower growth trajectory of 1.4 per cent quarter by quarter, or 41.8 per cent year-on-year. Video now accounts for 17 per cent of general display advertising expenditure.

FMCG advertisers were the single biggest investors in online video advertising in Q3, representing 15 per cent of total video revenue, the IAB said. However, auto advertisers weren’t far behind and increased their video spend to 12.7 per cent.

The IAB Online Advertising Expenditure Report was produced by PricewaterhouseCoopers.

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