Frost & Sullivan: Australian online general and advertising market to reach $1,493 million in 2018
~ Online video fastest growing, outperforming all segments to attain 34% market share by 2018 ~
SYDNEY, Nov. 6, 2013 /PRNewswire/ -- Australia's online general advertising market grew a robust 12% in the last 12 months to reach $862 million in June 2013. Online video was the fastest growing type of online general advertising inventory, accounting for 15% of overall online general advertising revenues, up from 11% in 2012. Social media accounted for 11% of the overall market, up from 9% in 2012.
Ad networks and the major online publishers lost market share, the latter by 2% compared to the previous year, although this segment still occupied the largest slice of the online general advertising revenue pie.
Frost & Sullivan's new report, Australian Online General and Mobile Advertising Market 2013 forecasts Australia's online general advertising market to grow at a CAGR of 12% to reach $1,493 million in 2018. Spending will grow across all online general advertising products, particularly online display and e-mail campaigns. The online video advertising market is predicted to outperform all other online general advertising segments, increasing from $133 million in 2013 to $513 million in 2018, with its market share reaching 34% in 2018.
Several online publishers including Fairfax Media and Yahoo!7 are developing Data Management Platforms (DMPs). Phil Harpur, Senior Research Manager, Australia & New Zealand, Frost & Sullivan explains, "DMPs enable aggregation and analysis of subscription and transactional data, allowing better understanding of customers, and therefore, more effective targeting. As a consequence, a growing proportion of ads served on their networks are using more advanced targeting techniques, providing better market offerings from the perspective of online content and ad inventory creation, through more targeted customer engagement".
Although challenged by larger publishers, the second tier online publishing market segment grew solidly over the last 12 months. Players such as Prime Media Group are pursuing strategies of becoming digital communities to reduce reliance on banner advertising. Major online classifieds publishers like REA and Carsales are continuously strengthening their general advertising businesses outside of their online classified listings.
Harpur says the advent of ad exchanges into the online advertising ecosystem has effected fundamental changes in the way agencies, publishers and ad networks buy and sell online ad inventory. "This impact has been significant in the past 12 to 24 months, with the market for video ad buying progressing significantly over the last 12 months. "Media agencies buy a growing proportion of their ads spots directly on ad exchanges via their own Demand Side Platforms (DSPs) or trading desks; bypassing ad networks, who deal with second and third tier sites. Performance based advertising networks, in particular, are under pressure from the growing programmatic ad buying ecosystem," elaborates Harpur.
Frost & Sullivan's survey of online advertising buyers across eight industry verticals found that about half achieved measurable ROI from their online general advertising in 2013. Growth in budget allocation was reported across all types of online general advertising inventory, but particularly in online display and e-newsletters during the prior 12 months.
Harpur stated, "The migration from offline to online channels is a substantial factor in the growth of the online advertising market. "40% of advertisers divert funds from traditional media advertising (such as newspapers, print directories, direct mail, TV, and radio) to increase online display advertising expenditure".
"Market demand is strong for sponsorships, integrated site content and customised solutions from online publishers. Bespoke executions such as sponsored content and events garner particularly high demand. E-mail campaigns have proven to be a highly effective and efficient targeted response platform, and interest has resurged in EDM and e-newsletters over the last 12 months. The affiliate online advertising market has grown healthily during the 12 months, mainly amongst e-tailers in the retail sector with stronger adoption beginning to be observed amongst large bricks & mortar store chains as well," finished Harpur.
Frost & Sullivan's Australian Online General and Mobile Advertising Market 2013 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. If you are interested in more information on this study, please send an e-mail with your contact details to Donna Jeremiah, Corporate Communications, at djeremiah@frost.com.
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