Tag Archives: ad spend

Desktop display ad growth slows, while mobile surges 220%

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Online ad spend grew 18% year on year to hit $3.3 billion in 2012 with mobile and video showing the strongest growth.

IAB Australia’s ‘Online Advertising Expenditure Report’ (OAER) shows a 220% surge in mobile advertising, representing expenditure of $86.2 million, and a 30% jump for video, which reached $90.3 million.

Mobile’s growth has been reminiscent of the early days of online advertising, but should start to slow Gai Le Roy, Director of Research for IAB Australia comments. “The inexorable rise of mobile, video and search is showing little sign of abating and we are delighted that the online industry is continuing to beat all reported market predictions about lower growth rates,” Le Roy says.

“While mobile is currently experiencing a surge, we expect it will settle into strong and sustained growth rates, just as general online advertising expenditure did in 2000 after an extraordinary period of growth.”

Comparatively, growth for display and classifieds ads has pared back, dropping to 10% and 9% respectively, while search and directories grew 27% year on year. Search and directories remain the largest contributor to ad spend accounting for 54%. General display advertising accounted for 26% and classifieds for 20%.

Motor vehicles, finance and real estate continued to dominate the market, but retail and FMCG showed the biggest increases, reflecting the continuing shift of advertising dollars in those sectors to online.

Based on submissions from publishers, 58% of mobile advertising for quarter four of 2012 was allocated to smartphones versus 42% to tablets, and 56% was general display while 44% was search. Total expenditure for the three months ended 31 December 2012 was $33.8m, a growth of 55% over the previous quarter.

As a whole, online advertising expenditure reported an 11% increase over the previous quarter to reach $899m for the final period of the year.

CPM remains the dominant pricing methodology across the industry, increasing to 63% of general display advertising expenditures, with 37% being direct response based.

 

2013 forecast: Ad growth to stagnate, FMCG spend to slump

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Very little growth is predicted for the ad market in 2013, with slumps expected from the food and FMCG sectors, and newspaper, magazine and out of home channels anticipating sizeable drops.

Marginal growth is described as the new normal for advertisers in Starcom MediaVest Group’s latest ‘Media Futures’ survey, with media executives less optimistic about budget growth than advertisers, predicting only 1.2% and 1.7% increases in budgets respectively.

The media sectors likely to buck the overall trend are online search, forecast to jump 14.5%, display, by 9.4%, and mobile, by 11.6%, as the internet advertising market continues to outperform more established media channels. Newspapers, magazines and out-of-home are forecast to be the hardest hit media this year, with falls of 3.2%, 2.5% and 2.9% respectively.

However, free-to-air TV (FTA) looks to be one channel resistant to the online advance. While most advertisers (92%) used online display advertising in 2012, FTA TV was still the most frequently used medium and 85% of advertisers say they will use FTA primary channels again in 2013.

“As I’ve said before, this very marginal growth is the ‘new normal’ and it’s a continuation of a trend we’ve seen for the past few years,” Starcom MediaVest group chairman John Sintras says.

Media executives anticipate the biggest uplift in TV revenues will come from sports and special events. Government and automotive are predicted to be the best performing categories with 67% and 62% of executives anticipating growth in these categories respectively. Retail, finance and telecommunications are also likely to see an increase in spending. On the other hand, budgets for FMCG and food are expected to decrease substantially.

“We’re heading into a new Federal election cycle in 2013 and we expect this will have a positive effect, especially on FTA TV advertising,” Sintras comments.

“With Nine and Fox Sports paying a record price for NRL rights, and with the AFL being ever popular around the country, it’s no surprise that sports will be what drives TV revenue in 2013.

“Online media across all platforms continues to outperform the more established channels in terms of revenue growth. The availability and quality of performance data, allowing real-time optimisation and industry leading ROI evaluation will only see this trend continue.”

In terms of below-the-line media, almost three quarters of marketers used public relations in 2012 and anticipate they will do the same in 2013. Mobile internet is the big growth medium, with 32% of marketers saying they will use it this year, compared with 25% in 2012. Catalogues, unaddressed direct mail, exhibitions and branded content are all likely to see budgets contract.

Starcom MediaVest will revisit the Media Futures survey later in the year to compare expectations with actual spend in the first half of 2013.

 

Ad growth downgrades: 2012 to close at 0.1%, 2013 down to 1.5%

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Growth in Australian ad spend looks set to close the year at a paltry 0.1%, after earlier forecasts of 0.7% were downgraded.

ZenithOptimedia’s December report forecasts takings of $12.4 billion for 2012, while issuing a downgrade due to a week fourth quarter in which Christmas retail spend is expected to falter.

The media agency also downgraded forecasts for 2013 from 2.4% to 1.5%, to hit $12.6 billion. The market is expected to pick up thereafter, forecast to reach $13.3 billion by 2015.

The relatively healthy economy, compared to global markets, has not translated into a strong performance in the ad market for 2012, the report notes. ”The economic picture is bolstered by the resource sector, and that is not a big advertiser.”

Looking ahead, the strongest performers will be cinema and online, with cinema to grow 12% this year and 8% next year, and online to jump 17.1% and 14.9%.

Outdoor will also grow, by 2% both this year and next, as will television (up 0.4% and 1%) and radio (up 0.3% and 2%).

The fortunes of print will continue to decline, with newspapers expected to drop 11% this year and 9.5% next year, and magazines to decline 14% and 9.7%.

Meantime, the global market is expected to rise by 3.3% in 2012 to $497 billion, and by 4.1% in 2013, to $518 billion. Looking further ahead, the industry is expected to expand by 5% in 2014, and then register an additional 5.6% gain to reach $574 billion in 2015.

Globally, television is expected to hold steady at just over 40% of all media spend, with growth from $198 billion in 2012 to $226 billion in 2015.

Online media is forecast to grow by 18% this year and 19.8% next year, and by 2015, it is expected to account for 23.4% of the market, or $132 billion.

Newspapers, on the other hand, are expected to contract from 18.9% of the market to 15.9%, or $90.1 billion, by 2015. Magazines will also drop with sales predicted to slide from $43.2 billion to $41.6 billion.

Online ad growth slows but on track to surpass TV in 2013

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Online advertising grew 10% year on year for the three months ending September 2012, while mobile advertising jumped 190% — figures that represent strong but slowing growth for both.

Released by the Interactive Advertising Bureau Australia (IAB), the data shows that year on year growth for the September period was around half of what it was in the June quarter for online, when it hit 21%.

The growth rate for mobile was also slightly down – from 212% year on year in June, to 190% year on year in September.

However, the IAB’s latest Online Advertising Expenditure Report puts the online market on track to surpass TV for ad revenues next year. It already surpassed the revenues taken in by newspaper advertising earlier this year.

CEO of IAB Australia, Paul Fisher, says while growth slowed during the past quarter the outlook for the Christmas quarter looks encouraging. “Double-digit growth in the media and economic climate of the past 12 months bucks the trend across the broader media industry,” Fisher says.

“Our work as an industry to improve online behavioural advertising technology and deliver better audience and campaign measurement tools has resulted in more ‘brand’ focused online advertising display formats and a clear and growing confidence in the medium by marketers.”

For the three months ending September, online ad spend hit $813.25 million. In comparison, mobile spend is still in its infancy, at only $22 million for the quarter.

Search and directories continues to dominate the sector overall, accounting for 53% of spend. Classifieds accounts for 21% of the market, while general display takes in 26% of market share.

Video advertising increased to $20.7 million for the period, while email advertising declined to $5.8 million.

Within general display, the motor vehicle category grew strongly to be the highest spending in the advertising industry this quarter, with finance and real estate sectors the next largest categories. The retail industry’s share of expenditure reached 7.2%, up from 6.5% in the previous quarter. In classifieds, real estate, recruitment and automotive were the leading categories.

CPM is now the dominant pricing methodology, with 62% of general display advertising expenditures and 38% being direct response based.

The report is compiled using data from industry participants and estimates for Google display, video and mobile advertising, and Facebook display and mobile advertising.

ZenithOptimedia: Australian ad market to remain sluggish until 2014

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Australia’s ad market is expected to grow at sluggish rates over the next few years according to ZenithOptimedia’s global ad spend forecast, which predicts spend will hit $12.5 billion locally by the end of the year and grow by only 0.7% to $12.8 billion next year.

It is not until the following year that the market is expected to rebound, when it is forecast to reach $13.8 billion, leaving the local market to perform below global averages in the meantime.

Globally, expenditure growth is forecast to strengthen over the next two years, rising from 3.8% in 2012 to 4.6% in 2013 and 5.2% in 2014.

Predictions for Asia Pacific as a region are slightly stronger than the global average with a spend of US$148.4 billion forecast in 2013, a 5.7% year-on-year increase, and US$157.2 billion forecast for 2014, a 5.9% year-on-year increase.

The dim forecasts in Australia come despite other reports showing increased confidence among marketers. Nielsen’s figures for quarter two spend however, show that APAC spend figures were being propped up by strong performances from the Philippines, Indonesia and Hong Kong, while Australia registered a decline.

ZenithOptimedia Group global chief executive officer Steve King says, “Advertisers are broadly continuing to invest, despite the global economic concerns and issues.

“However, they are seeking to ensure that any expenditures are delivering strong return on investment. The US continues to deliver solid growth. This, combined with the growth in developing markets and in digital media, has helped mitigate the drop in Eurozone spending.”

 

Ad market: Revenue stumble slight as print-digital shift hastens

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While the overall drop in advertising revenue for the first six months of the year was only slight, the gap between the winners and losers in the ad market continues to widen, from a drop of 26.0% for magazines to a gain of 29.8% for online.

Figures from the Commercial Economic Advisory Service of Australia (CEASA) show total media advertising revenue dropped by 0.4% year on year to $6,745,314,000 for the first six months of 2012.

The divided fortunes of the industry illustrate an accelerated shift from print to digital, with magazines the hardest hard hit, followed by classified directories, down 15.9%, and newspapers which shed 11.5%

Online notched the largest increase followed by subscription televisions, up 17.3% and outdoor advertising revenue, up 2.9%.

Overall the decline was slight compared to other periods of hard time, says CEO of CEASA, Bernard Holt. The media tracking body, which commenced its measurement of the industry in 1960, has seen declines of 8% in 2009, 6.9% in 2001, 6% in 1991 and 2% in 1990 in its 52 year history.

“From 1990 media advertising revenue began to show a boom and bust cycle, and the cycle was not uniform,” Holt says. “It also featured sharp ups and downs. In most cases recovery was strong.”

Other media to record an increase in advertising revenue included total radio, up 1.3%, suburban newspapers, up 0.8% and regional television up 0.6%. The fortunes of free to air metropolitan television dropped by 3.5% while metropolitan radio, down by 0.6%.

 

Online ad spend surpasses newspapers in Aus for first time

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According to the Commercial Economic Advisory Service Australia (CEASA), online advertising expenditure surpassed that of newspapers for the first time in the first half of this year.

The report details advertising spend in the six months to 30 June 2012, showing that $1.63 billion was spent on online advertising compared to $1.5 billion on newspapers.

Online spend was second only to free-to-air TV, which collected $1.65 billion in ad dollars.

The ability of online advertising spends to buck the trends saw it grow by 30% over the first half of 2011 at a time when the total Australian advertising market of $6.745 billion decreased by half a percent. That brings online’s market share to 24.2% in the period concerned, compared to 24.4% for free TV and 21.6% for newspapers. Last year online advertising’s share was 18.5%.

CEASA’s advertising spend data is sourced directly from main media providers.

Chief executive of the Interactive Advertising Bureau Australia, Paul Fisher, says that with these latest figures Australia comes a step closer to becoming only the fourth market worldwide where online attracts more spend than all other media, which he expects to happen next year.

“IAB and the broader industry are working hard to improve online audience and campaign measurement, develop and implement the infrastructure of standards, guidelines and best practice, offering more compelling ad formats online for brands.  These factors will see online advertising continue to outpace the market and eventually TV advertising expenditure in 2013. This will make online the leading advertising medium in Australia, a status currently only achieved in the UK, Denmark and the Netherlands,” Fisher says.

 

Sorrell: Big shift from legacy press to digital still to come

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WPP chief executive Sir Martin Sorrell warned legacy press, such as hard copy newspapers and magazines, that his company’s ad investment in their outlets will reduce, at a breakfast in Sydney this morning.

Speaking at the Growth Faculty’s ‘Global Leadership Series’ event, Sorrell told an audience of 750 industry representatives that WPP’s media spend on legacy media was disproportionate to the amount of time people were spending consuming them.

“There are two major shifts still to come,” Sorrell said. “The two big disconnects are internet and mobile where we know people spend around a third of their time, but our client’s budgets are only 19%.”

“Legacy press – newspapers and magazines – are 19% of our budgets worldwide, but consumers spend only 9% of their time on them. Those are the two big changes that have to take place.”

WPP, the communication services giant, bought about $72b in media last year, Sorrell revealed, with $2.5b spent on its largest media owner, an unidentified, traditional media outlet. This year, the group’s spend on Google is expected to rival or even surpass this, with at least $2.3b forecast to feed into the web giant.

“Google is a five-legged stool,” Sorrell said, explaining that it is far more than just a search engine. “It’s powerful in search – 80%-90% of market share… worryingly high, that’s why I call them a ‘frenemy’. Then you have display where they’re trying to increase their penetration. Then you have YouTube and video. Then you have social – Google+. Some people poo poo Google+, but it’s strong. Last and most importantly you have mobile.”

Facebook, in comparison, benefitted from WPP to the tune of $200m last year, and should earn $400m from the firm’s coffers this year. Sorrell reinforced that the social network is a branding medium, not an advertising medium. “This is about social conversations and broadly people don’t like social conversations interrupted by commercial messages,” he said.

Commenting on mobile, Sorrell said the growth of the medium had been disappointing to date but is starting to come now that smartphones have taken off. “Google’s acquisition of Motorola mobility is the single most important catalyst to the growth of mobile and mobile advertising,” he added.

WPP’s strategy for growth will focus on new markets, new media, consumer insights and ‘horizontality’, as the company seeks to forge ahead by encouraging its various advertising, media planning, insights, communications and marketing businesses to work together.

OOH: 10th quarter of growth, 13% audience increase

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The out of home ad industry grew by 3% year on year during the June quarter, it’s tenth consecutive quarter of growth, as the number of Australians exposed to its footprint grew 13%.

Daily contacts with OOH ads rose from 229 million a year ago to 338 million at the end of June, according to the industry’s measurement system MOVE. This has sparked continual growth for the industry, which took in $235.5 million in ad spend during the June quarter this year.

Charmaine Moldrich, CEO of the Outdoor Media Association, says OOH continues to outstrip other traditional media channels thanks to the measurability of MOVE, which has been updated to cover more sites.

“All updates and changes to data for 2012 are the result of changing market conditions and a methodology update to the transit model within MOVE. MOVE is now able to further prove the strength of OOH by reporting on OOH’s ability to connect advertisers with even more people daily,” Moldrich says.

Since the September 2011 data release, inventory within the system has been updated to include new sites, the removal of old sites and site transfers between operators, contributing to a 5.5% increase in OOH sites measured by MOVE. In addition to these signage updates, MOVE further improved its methodology in measuring people waiting for buses. The effect of this update to the transit model broadly is a 5% – 10% increase in audience contacts for buses.

As part of this data update, MOVE software now includes the 2012 target audience potentials for each demographic, adding a further 1.8% increase to the contacts. Target audience potentials on each report should now match the OZTAM 2012 demographics.

“This methodology change allows us to confidently report improved contact data for buses; audience which was always there but we weren’t able to report on until now,” Moldrich adds.

 

Australian ad spend growth forecast downgraded

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Expected ad spend growth in Australia for the rest of the year has screeched to a near halt from the 3.8% forecast for 2012 to a paltry 0.8% predicted for year end.

Following a poor showing in the first six months of the year which saw growth of 1.3%, Starcom’s updated Media Futures forecast has downgraded expectations for the remainder of the year. The downgrade marks the second year in a row that advertisers have overestimated their budget growth rate and revised it down in the mid-year survey.

“These figures reflect a trend we have observed over the past few years, with advertisers exercising a cautious approach to spending in a climate where there is still uncertainty over the global economic conditions,” CEO of Starcom MediaVest John Sintras explains.

Launched in 1985, Starcom’s Media Futures survey interviews national advertisers and key media executives drawn from Australia’s top 600 advertisers. Only 38% of advertisers increased their advertising budgets in the first six months of the year compared with 44% at the same time last year.

Online ad spend did not suffer from the decline however, posting an increase among 62% of advertisers’ budgets. Free-to-air TV and newspaper spend increased among 38% of advertisers while STV, radio, magazines and out of home all registered increases among 25% of the sample.

For the second half of the year only 33% of advertisers are predicting an increase in their advertising budgets, continuing a downward movement seen over the past two years.

“The past two years of the survey have shown the mid-year update is a much closer forecast to actual spend, so it’s likely to be a very tight end to 2012,” Sintras adds.

 

Online ad spend cracks $3b, mobile growth ten times total online

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Growth in mobile ad spend outpaced growth in total online revenue by a factor of ten to one during the past financial year, as the online ad industry cracked $3 billion for the first time.

According to figures released by the Interactive Advertising Bureau Australia (IAB) total online advertising increased 21% year on year to reach $3.136 billion over the 12 months to 30 June, while mobile ad spend reached $47.5 million, a 212% increase.

The end of year figures mark the first time mobile has been included in the reporting and show the cost effectiveness of the approach, says Paul Fisher, CEO of IAB Australia.

“The growth in mobile advertising over the past six quarters shows that for a minor investment relative to TV, print and other media spends, marketers can add mobile audience reach and executions to their online search and display campaigns,” Fisher says.

Compiled by PricewaterhouseCoopers (PwC), the ‘Online Advertising Expenditure Report’ shows search and directories continue to dominate the sector taking a 52% share of spend, or $1.639 billion, a 30% year-on-year increase. Classifieds holds 21% of the market’s value ($643 million) and increased 11%, while general display reached $853 million (27% of the market) with a 15% increase.

Of mobile advertising, general display advertising accounted for 60% and search advertising accounted for 40% for the three months ending 30 June. Smartphone advertising accounted for 68% while tablet advertising accounted for 32% of this spend.

The June 2012 report also included estimates for Google and Facebook, adopting a new approach which collected data collected industry participants. Historical mobile advertising data collected from industry participants from March 2011 was combined with estimated Google mobile advertising, to give a picture of the aggregated mobile advertising market and growth trends.

Maria Martin, partner at PricewaterhouseCoopers explains that “with the continuing explosion in online and mobile we thought it was essential to include an estimate of advertising revenue for  Google and Facebook, together with mobile advertising expenditures, to provide what we believe is now the most accurate data capture of the Australian online and mobile advertising market. The growth is strong and consistent with forecasts and trends in other major markets such as the US.”

IAB June 12

Comparative data for the period from September 2010 has been restated to be consistent with the methodology changes.

The IAB predicts online advertising will surpass free TV in calendar year 2013 and print in the 2013-14 financial year.

 

Online ad spend to exceed $3b earlier than expected, as display bounces back

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Online advertising expenditure posted first quarter growth of 19% year on year for the period ending in March, driven by a surge in display advertising.

Figures compiled by PriceWaterhouseCoopers for the Interactive Advertising Bureau (IAB) put the online ad industry at $713 million in quarter one of 2012, and on track to reach $3 billion this calendar year.

Search and directories continued to dominate the sector during the current period, accounting for  55.5% of revenue, or $395.7 million, grew 21.4 percent year on year to account with directories growing at a faster rate than search during the period.

Display advertising bounced back after lower than expected growth last year, recording year-on-year growth of 18%, its highest increase since 2008. It now ranks in third place by share of revenue, with 21.6% of the market, just behind classifieds which grew 13% year on year to account for 22.9% in the period ending 31 March.

CEO of IAB Australia, Paul Fisher, comments that as more advertisers moves online they are enjoying the benefits of measurability and aren’t being disappointed by results. “The continued growth of online reflects the strengthening confidence of marketers and agencies that online is their medium of choice,” Fisher says. “In this challenging economic environment they look to online to provide measurability, reach, frequency, brand and direct response messaging – and they aren’t being disappointed.”

Classifieds continued to migrate from other media over the current period to reach $165.3 million in revenue, fuelled by strong growth in the real estate, automotive and recruitment sectors.

Within the display category, the FMCG sector posted significant year on year growth as brands looked to reach grocery buyers online.  Video, which will be reported in greater detail by the IAB this year, also reported strong year-on-year growth to reach $11.6 million for quarter.

Fisher has no doubt that online advertising in on track to surpass the $3 billion mark forecast for this calendar year, taking its share of the ad market to 20%. “It’s quite possible that we’ll reach that milestone this financial year thanks to increased consumer confidence sparked by further interest rate cuts which we believe will support continued growth in online advertising in key sectors,” Fisher adds.

Online spend from the retail and government sectors continue to flat line, in surprising results from the tracking, considering both are facing tough marketing and communications conditions. Fisher comments, “There is a real opportunity for these sectors to invest their advertising budgets online where they will reach, engage and influence their audiences most effectively and we’ll be working hard through this year to help them understand the potential that online offers them.”

CPM-based pricing continued as the dominant expenditure type, accounting for 74% of advertising expenditure, ahead of the direct response method which made up the remaining 26%.