Online overtakes TV for ad spending: IAB

Banner ads and other general display advertising show strongest growth

Spending on online advertising has beaten free-to-air TV for the first time in Australia, according to a PricewaterhouseCoopers report sponsored by the Interactive Advertising Bureau (IAB).

In 2013, online ad spending hit nearly $4 billion – growing 19.3 per cent from the previous year – while advertisers spent about $3.9 million on free-to-air TV, according to IAB Australia’s online advertising expenditure report for the quarter ended 31 December.

It’s a mammoth increase from ten years ago, when IAB’s 2003 report found that $236 million in ad dollars went to online.

Of the $4 billion spent on online ads in 2013, $2 billion was search and directories, $1.1 billion was general display advertising and $743 million was classifieds, the report said.

General display advertising – including website banner ads, emails and sponsorships – has seen the biggest growth, increasing 28.4 per cent from 2012, it said.

The IAB noted a growing use of video, with that type of ad accounting for 15 per cent of display revenue in the quarter ending 31 December – 72 per cent more than in the same quarter last year.

The top three categories of general display advertising in the quarter were motor vehicles, finance and retail, together representing 41.3 per cent of display ad market, the report said. That was up from 40.2 per cent in the same quarter in 2012.

Retail grew the most, increasing its share to 10.5 per cent in the December quarter from 8.8 per cent in the same quarter in 2012.

Also showing strong growth is mobile advertising, which quadrupled to $349.2 million in 2013. In the quarter, mobile represented 14.3 per cent of total online spending, up from 11 per cent in the previous quarter, the IAB report found.

“The industry should be very proud of these strong results, particularly given the 19.3 per cent growth rate is actually an increase on last year's,” IAB Australia director of research, Gai Le Roy, said in a statement.

“Digital advertising continues to evolve in terms of offerings and its ability to demonstrate strong ROI for marketers so we expect to see the growth rates sustained for some time to come."

The IAB report measures data reported directly to PwC by online ad selling companies representing 1000 websites.

Adam Bender covers digital marketing and wearable computing for CMO and is the author of a dystopian novel about surveillance. Follow him on Twitter: @WatchAdam

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