March 21, 2011
Paul Fisher, CEO of IAB Australia, told the Future of Digital Advertising Summit conference in Sydney this week: “Online will very quickly become the number one advertising channel by volume and by share, overtaking television and newspapers. There are only two other countries where that has happened: the UK and Denmark.
“Australia is a very fast growing economy for digital advertising: it is growing faster than the global market and faster than Asia Pacific.”
He told the audience: “We are going to move very heavily into a world where media planning and buying for advertising and for measurement is not about digital as a silo as it has been for the last 10 or 15 years. It is now going to be now very much in comparison with TV and newspapers.”
He added: “Global marketers with multibillion dollar budgets are not moving into digital because they think it is sexy…The single reason driving online advertising growth is consumer behaviour: people are spending huge amounts of time online.”
Fisher cited forecasts from PricewaterhouseCoopers that put the CAGR for the digital advertising marketing in Australia growing at an average of 14.2 percent between now and 2014, compared to 13.7 percent for Asia Pacific and 10.6 percent globally.
For Australia, PWC is forecasting TV advertising to grow at an average of 1.9 percent to 2014 to reach $3.808b, newspaper advertising to grow at 3.9 percent to reach $3.811b and Internet advertising to grow at 15.4 percent to reach $3.854b.
“When people say to you ‘Is the money moving out of TV and newspaper to digital?’ of course it is…There is a strategic shift of billions of dollar of money moving out of TV and newspapers and into digital every year over the next three or four years,” Fisher said. “But TV and newspaper advertising are not going to die. They will still be multibillion dollar industries.”
The big winner, according to Fisher, will be search advertising. “We think search will be the dominant player, probably securing a 50 percent share of the market. Display will take around 27-30 percent and classifieds about 23-25 percent. We don’t think those shares wil change much.”
Fisher said strong growth was expected in video advertising: its share of the online marketing spend in Australia is presently significantly smaller than in the US and UK.
“In the US five percent of total online ad spend and 14 percent of display ad spend goes on video. In Australia those figures are only 1.4 percent and five percent. It’s likely we will follow the same growth curve as the US over the next three or four years.”
Mobile advertising growth in Australia is tipped to outstrip global growth by even greater margins than the overall digital advertising market. PWC is forecasting 73.0 percent CAGR to take the figure from $26m in 2010 to $219m in 2014, compared to global growth figures of 27.7 percent and 22.5 percent for Asia Pacific. Fisher said these figures were for display ads only.
However he said there was a lack of accurate data on the Australian market compared to Internet advertising. “We don’t have in this country an accurate capture of mobile advertising expenditure, but we intend to change that in the first half of this year. There is an initiative where we are going to try and persuade publishers to offer up their actual mobile advertising revenues to PricewaterhouseCoopers as they do for online expenditure.”