IAB: Mobile and video the growth engines behind online advertising rise

Online advertising is continuing on its rapid growth trajectory, recording a 17.1 per cent year-on-year expenditure increase in the first quarter of the year, the Interactive Advertising Bureau (IAB) reports.

The association’s latest Online Advertising Expenditure Report with PricewaterhouseCoopers valued total online advertising at $1.067bn for the three months to 31 March 2014, with general display advertising chalking up the strongest growth over the quarter at 27.5 per cent. This was followed by search and directories, with a 16.8 per cent increase.

Mobile advertising put in a strong performance, representing 21.5 per cent of digital display revenue during Q1, and up from 19.5 per recent in the last quarter of 2013. Mobile also accounted for 17.1 per cent of search revenues, a rise of 1 per cent on the previous quarter. In total, mobile advertising made up 15.3 per cent of total online advertising expenditure, compared to 14.3 per cent in the last quarter.

But it was video advertising that saw the largest leap, rising 55.7 per cent year-on-year to represent 14.3 per cent of the digital display dollars during over the quarter.

On the flip side, email display advertising fell to a record low of 1 per cent during the quarter and was valued at $2.9 million.

Overall, the search and directories segment represented the biggest portion of the online advertising market at 54.4 per cent of total revenues, with $580.4 million in advertising expenditure over the quarter.

IAB CEO, Alice Manners, wasn’t surprised by the mobile and video figures, and anticipates continued growth for both platforms.

The association also pointed out the PwC data supports the recently released CEASA report, which attributes 30 per cent of all advertising spend in 2013 to digital channels.

In the IAB’s yearly report on online advertising released in February, it reported that online ad spend hit nearly $4 billion last year, compared with $3.9 billion on free-to-air TV.

“The March quarter is always slightly softer than the strong December quarter, however, it was pleasing to see strong year-on-year results,” added IAB director of research, Gai LeRoy. “Early indications are positive for the current quarter, particularly with a lot of activity in the video ad space.”

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.