Online advertising market to top $2 billion

The Australian online advertising market will pass the $2 billion mark in the next 12 months, according to the IAB Australia’s Online Advertising Expenditure Report.

The report, which was prepared by PricewaterhouseCoopers, found 2008 revenue was $1.7 billion, an increase of 27% from 2007. Revenue for the quarter ending 31 December was up 22% from the year before to $464 million, but only recorded a 2.4% increase from the previous quarter.

General display and classifieds advertising made up 28.1% and 23.4% respectively of total online advertising spending for the fourth quarter, with search and directories advertising accounting for the remaining 48.5%.

The finance, computers and communications and motor vehicle industries are the leading industries using online advertising, making up more than 48% of general display spending. The finance industry was the highest spender in the fourth quarter at 21.3% – up 20.2% from the previous quarter.

IAB Australia chief executive Paul Fisher said the growth in advertising spending is evidence of growing confidence in the online sector.

“The figures clearly show that online is now seen by a growing number of marketers and agencies as a ‘core’ advertising medium, and they are continuing to shift their investment where they can more cost effectively reach and engage their consumers with their brand and direct response messages,” Fisher says.

“As marketers and agencies face increasing pressure to gain maximum and measureable returns on their investments, we expect this shift to online expenditure will continue and quite possibly surpass $2 billion by the end of the calendar year.”

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