Australia's love of online search advertising continues, finds new report

Latest Frost and Sullivan research shows double-digit growth in online search advertising driven by rise in mobile usage, as well as digital marketing practices

A new report shows Australia’s online search advertising market is experiencing double-digit growth and is expected to continue outperforming all other major online advertising segments as mobile search increases.

According to the latest Frost and Sullivan Australian Online Search and Directories Market 2013 report, online search grew 23 per cent between June 2012 and June 2013, exceeding all other types of major online advertising segments including online general advertising such as sponsorships, integrated site content and e-newsletters, classified and directories.

Online search is forecast to outpace online directories over the next five years and chalk up a compound annual growth rate (CAGR) of 16 per cent through to 2018. This will see the total online search and directories market share increase from 83 per cent to 91 per cent within the next five years.

Frost and Sullivan ICT practice senior research manager, Phil Harpur, also pointed out the volume of local search conducted via mobile is growing at a much faster rate than fixed Internet connections. The figure should come as no surprise to any marketers, given smartphones and tablets are increasingly becoming the preferred channel choice for consumers.

A report produced earlier this year by Telsyte also reported mobile search advertising is experiencing faster growth in Australia than expected, representing 30 per cent of the total paid search links being served during the second quarter of this year. The analyst group expected this figure to rise to 33.3 per cent in the fourth quarter of 2013.

In line with this, a Mobile Marketing Association survey across Asia-Pacific found mobile marketing budgets are set to get a big boost next year, with 90 per cent of respondents indicating more spend will be directed at capitalising on rapid smartphone and tablet device adoption. One-third of marketers expected mobile spend to increase by up to 75 per cent.

However, what remains a concern is that many marketers still don’t have formalised mobile strategies in place, running the risk of disconnect in their customer engagement.

IAB and Nielsen launch mobile advertising audience measurement pilot
Mobile ad spending leaps at Facebook
Tablet advertising exceeds smartphone spend in March quarter: IAB

In a sign of rising interest in geo-targeting and location-based advertising, Harpur noted a high proportion of mobile searches optimised for location-based material in the Frost and Sullivan report. In addition, click-to-call features are becoming more prominent in mobile search.

This year’s report also claimed the percentage of advertising budgets going on search advertising and SEO services will increase over the past 12 months, a trend led by the migration from offline to online channels. More than 50 per cent of advertisers divert funds from traditional media advertising towards augmenting their search advertising expenditure, Frost and Sullivan stated, and are increasingly focused on optimising advertising and marketing inventory and services into a single SEO strategy.

Key reasons for search engine advertising activity include the relatively high click through rates, and low cost-per-click on mobile devices.

While Google dominates the market, Sensis’ search advertising offering, Sensis ClickManager, experienced strong revenue growth in 2013, the report stated. Adlux also established itself with solid growth off a small base, Harpur added.

Online directories growth stabilised during 2012-2013 after the slowdown in recent years, with overall revenue growth increasing from 1 to 4 per cent. However, Frost and Sullivan warned Google’s influence and control over the search and online directory space continues to challenge the market and predicted revenues continuing to gradually decline.

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

Join the newsletter!

Error: Please check your email address.
Show Comments

Blog Posts

To DMP or not to DMP?

There are plenty of brands that can benefit from plugging into a data management platform. But should you engage an agency to run one or bring it in-house?

Ben Willee and Richard Taylor

Spinach Advertising

Innovations in retail will bring creative and technology closer than ever

While approaching a customer in a shop and asking what you can help them with is Retail 101, how many of us actually enjoy being approached? Generally, you have to give the forced, fake smile and say, “Just browsing, thanks,” while screaming on the inside, “just leave me alone!” Maybe it’s just me?

Jason Dooris

CEO and founder, Atomic 212

There’s a brand in my digital soup

Not a day passes by in the life of business executives where digital innovation or the prospect of disruption is not front of mind. This in turn, drives an unrelenting flow of questioning, discussion and strategy papers.

Jean-Luc Ambrosi

Author, marketer

I need to be reborn before i can grow up & become a contestent.

Kaye Peterkin

Channel Nine's content now streamed digitally on 9Now

Read more

I hope The Block, will continue for many many more seasons.When i die, & grow up, I want yo come back as a contestent.

Kaye Peterkin

Channel Nine's content now streamed digitally on 9Now

Read more

Sounds a bit confusing, but also like there're quite a few benefits. So, it's a good idea to link it with crm and marketing automation? D...

Kirsten

To DMP or not to DMP? - Marketing automation - CMO Australia

Read more

cc

Marjorie Campbell

Talk to me, Facebook! Social net buys speech recognition company

Read more

This would have the be the worst company to ever use. They never get back to you, they over promise and under deliver and when you questi...

Samantha Colbert

Aussie entrepreneur Nick Bell sells WME Group to Melbourne IT

Read more

Latest Podcast

More podcasts

Sign in