Australia’s online advertising market has shown positive growth, recording a year-on-year increase of 14%, according to figures released today by IAB Australia.

The association’s Online Advertising Expenditure Report (OAER), compiled by PricewaterhouseCoopers, revealed online advertising expenditure in Australia for the Q1 2009 totalled $439.5 million, the largest first-quarter recorded.

Combined with the record Q3 and Q4 of 2008, the results show a 22% growth when compared to the same quarters the previous financial year, with growth seen mainly in the search and directories sector of the industry.

However, the report indicates that the online advertising industry has been affected by the global financial crisis, with Q1 local consumer and business confidence and activity showing a drop of 5% drop from Q4 2008.

“Continued economic pressure on some of the key advertising industry sectors notably automotive, financial services, travel, and in the classifieds sector real estate, employment and automotive, resulted in these sectors dampening the previous rate of growth in the industry,” explains Paul Fisher, CEO of IAB Australia.

“[However], the fact that both the general display, and search and directories sectors experienced positive growth and the classifieds sector saw only a minimal decline is encouraging in the current climate.”

The report also revealed that the migration of revenues into search and directories saw this sector pushing past 50% of total online advertising revenue for Q1.

General display advertising and classifieds advertising accounted for 24.9% and 23.9% of the total advertising expenditure for the Q1 2009 respectively.

Finance, computers and communications, and automotive sectors continue to be the dominant industries using general display advertising, and comprise 46% of the general display spending.

Recruitment continues to be the leading category for classified advertising expenditure, followed by real estate, then automotive.

“The impact of the economic slowdown has strongly impacted the classified market during the quarter, with the first decrease in year-on-year expenditure seen since record keeping commenced in 2002. The decrease in the general display market from the previous quarter was to be expected, with the decrease showing a similar result to the trend of previous years,” says David Wiadrowski, PwC lead partner for technology, entertainment and media.