Frost & Sullivan: Australian Online General Advertising Market to reach A$2.43 billion by 2018

November 27, 2014 at 1:55 AM

Strong growth also predicted over the next five years for the Australian mobile advertising market

Sydney, Australia, 27 November 2014 – Expenditure on online general advertising in Australia is predicted to increase from A$1,150 million in 2014 to A$2,426 million in 2018, at a CAGR of 16%. The annual growth rate is predicted to gradually decline over the five year period to around 10% during 2019. 

Frost & Sullivan's new report, Australian Online General and Mobile Advertising Market 2014 finds that online video continues to be the fastest growing type of online general advertising inventory, with a growth rate of 60% during 2013/14, and now accounts for 17% of overall online general advertising expenditure.

“Sponsorships, integrated site content and in particular native advertising grew as online publishers increased their range of offerings. Also the affiliate online advertising market continues to grow strongly, especially in the online retail, finance and travel segments.” said Phil Harpur, Senior Research Manager, Frost & Sullivan Australia & New Zealand.

The ROI that advertisers are receiving from social media advertising is increasing. 72% of Australian organisations that have advertised on social media channels in the previous year report a positive ROI, compared to 63% in 2013.

The slowest growing category was EDM/e-newsletters, which actually saw negative growth during 2013/14, as companies move towards more cost effective online advertising solutions with a higher return on investment (ROI).

Harpur continued, "Strong growth is also predicted over the next five years for the Australian mobile advertising market, driven by strong growth in consumer media consumption on both smartphones and tablets, and better targeting capabilities by online publishers and mobile ad networks." 

Expenditure is forecast to reach A$900 million by 2019, with a CAGR between 2014 and 2019 of 27% with tablets predicted to account for over 70% of overall mobile advertising spend.

“Mobile advertising is increasingly being seen as an important part of the overall advertising strategy of both media agencies and brands. Mobile ad networks will need to continually evolve their business models, or their proprietary technology platforms will be superseded by the open nature and technology efficiencies of ad exchanges,” said Harpur.

Recently there has been an increased focus by online publishers on creating mobile content and advertising solutions in-house. This trend is predicted to continue over the next few years.

Harpur elaborated, “There is growing demand for innovative ad units, which have higher consumer engagement and impact. Also native advertising solutions are very popular amongst online publishers.”

Frost & Sullivan's Australian Online General and Mobile Advertising Market 2014 report forms part of the Frost & Sullivan Australian Digital Media program. All research services included in this subscription provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available.

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