Online classifieds advertising growth slows

by Marketing ON 16 April 2010

The Australian online classifieds advertising market grew by only 2.5% in 2009 to finish the calendar year valued at $506 million, a report from Frost & Sullivan has indicated.

This represents a stark decrease in growth when compared to the 2008’s figure of 28%, with the report, entitled ‘Australia Online Classifieds Advertising Market 2010’, demonstrating the marked impact of the global financial crisis on the local advertising sector.

However, the migration of classifieds advertising expenditure to the online channel has continued, with online now accounting for an estimated 25% of total classifieds advertising expenditure, up from 23% in 2008.

According to the report, growth in online classifieds advertising is likely to taper off over the next three years reaching $762 million by 2013 as the market reaches a higher state of maturity and social media tools provide organisations with an alternative medium to reaching target markets.

“As the Australian online classifieds market matures, it is, like the print classifieds market, becoming more closely correlated with economic conditions,” said Phil Harpur, senior research manager at Frost & Sullivan.

Of the three key online classified sectors: real estate, employment and automotive, employment was the worst hit by the economic slowdown with revenue falling 21% for the calendar year 2009.

The real estate and automotive sectors were less affected, with annual growth rates for 2009 of 24% and 22% respectively.

The report found that the most significant competitive development in real estate online classifieds advertising has been the launch on Google Maps of real estate listings, which presents a challenge to established online real estate publishers.

“As select sectors in the online classifieds market, such as the recruitment sector, have established themselves as more popular than print, both companies and consumers are questioning whether they also need to advertise on the print channel at all,” Harpur added.

Online advertising growing despite slowdown

by Marketing ON 30 September 2009

Despite a first quarter slowdown due to the global financial crisis, revenues from online advertising in Australia grew by 19% in 2008/09 to reach a total market value of $510 million.

According to a report from research company Frost & Sullivan, mobile advertising also grew during the year but is still blossoming with take-up hampered by a lack of industry standardisation and sophistication in targeting and personalisation.

The total value of the Australian mobile advertising market for 2008/09 was $7.5 million.

The report, ‘Australian Online General and Mobile Advertising 2009-2013’, has documented the trends and performance of mobile and online advertising activities such as display advertisements, electronic direct mail, integrated content, streaming video and email newsletters during the 12 months to June 2009.

“Although 2009s overall growth is slightly down when compared to the 22% increase in 2008, its still a very strong result given the economic environment. We anticipate that the online general advertising market will experience healthy growth over the next five years, reaching close to $1.2 billion in 2014,” explained Phil Harpur, senior research manager at Frost & Sullivan Australia New Zealand.

The report notes that although site display revenues may pick up again as economic conditions improve, the swing toward performance based solutions is expected to grow steadily over the next five years.

Email direct marketing was a strong performer, recording a growth rate of 20% during the year, with online video’s market share increased significantly to 25%.

This trend is expected to continue over the next few years especially as advertisers look for alternatives to the mainstream and established online display market.

Of the respondents surveyed, 40% of participants indicated that their company’s online general advertising budget increased in 2009 compared to the previous year, while 21% of companies indicated a decrease and 37% stated there had been no change.

In an interesting result, 15% of companies reported that they will be planning online budget reductions.

Online classified advertising shows weaker growth in 2009

by Marketing ON 19 May 2009

A report from Frost & Sullivan’s annual examination into the state of the local online advertising industry indicates online classifieds experienced a 26% growth in 2008 – a rate that has since dropped in 2009.

Despite finishing 2008 valued at $498 million, February 2009 has seen the market feel the impact of the economic downturn and, according to Frost & Sullivan, the continued slowdown is likely to result in a much smaller growth rate of 18% for both 2009 and 2010.

“Although online growth is slowing, its a much more resilient sector than print or television. Advertising buyers are likely to gravitate towards online given the increasing pressure to maximise returns on their investments – in fact, the economic downturn could actually accelerate the migration of print to online in some industries,” said Phil Harpur, ANZ senior research manager, Frost & Sullivan.

The fastest growing online classifieds sector in 2008 was real estate, experiencing 38% growth.

Employment, which accounted for 47% of total online classifieds revenue in 2007, dropped back to 45% in 2008.

During 2009/11, the Frost & Sullivan analysis predicts the classifieds sector will expand with the emergence of rural market classifieds, but there will be a slower growth of the online classifieds advertising market for 2009/10 compared to previous years.

According to the report, a significant potential restraint on growth in the shape of industry-owned websites, such as homehound.com.au, which now commands the third highest audience in property sites.