Online advertising continued to grow through 2008, reaching record revenues of $450m in the quarter ending 30th September according to figures released today by Interactive Advertising Bureau (IAB) Australia in its Online Advertising Expenditure Report (OAER) which is compiled by PriceWaterhouseCoopers (PWC).

Advertisers spent over $100m more in Q3 2008 than they did in the corresponding quarter in 2007, a growth of almost 30% year-on-year.

According to Paul Fisher, CEO of IAB Australia, the results clearly demonstrate the growing confidence in the medium particularly at a time when companies face pressures on their marketing decisions due to the global economic crisis.

“The figures reinforce the interactive advertising industry’s status as a mainstream medium for marketers and agencies. By any measure, 30% growth on the previous year is spectacular and further evidences the shift to online search, display and classifieds by marketers in all industries as they look to reach and engage consumers where they are most influenced whilst researching their purchase decisions.

“As we enter uncertain and volatile economic times ahead, online advertising offers marketers and buyers increasing value and unparalleled accountability and measurability for their limited marketing investments. Online addresses their key challenges of customer acquisition, customer retention, brand awareness and intent to purchase,” said Mr Fisher.

John Butterworth, CEO of AIMIA and IAB board member commented:

“The continued strength of the online advertising market in Australia is backed by this week’s release of the AIMIA Digital Services Index showing expenditure of $17.9 billion on overall digital services in Australia in 2008. Together both reports underscore the mainstream status of digital media across the entire Australian economy.”

All three categories, General Display, Classifieds and Search & Directories posted strong year-on-year and quarter-on-quarter growth. Search & Directories continues to lead industry growth, with 33% year-on-year growth and 13% growth on Q2 2008 and accounting for $212m of the Q3 total revenue. General display grew 29% year-on-year and 10% on the previous quarter, totalling $125.5m for the quarter. The Classifieds category grew by 25% year-on-year and 2% from Q2 to total $113.75m.

PwC lead partner for technology, entertainment and media, David Wiadrowski, said:

“The report shows the strong growth from the past quarters continuing into this quarter, despite market analysts predicting significantly reduced growth rates for the online advertising market. For the first time, the industry subcategory information reveals that motor vehicle manufacturers are the largest users of General Display advertising for an individual category.”

In an effort to provide further granularity to media agencies, marketers, publishers and other sales representatives, 41 industry sub-categories were reported, expanding from the previous 18 sub-categories. The results that can be gleaned from these categories include:

• Finance, Computers & Communications and Motor Vehicles sectors continue to be the dominant industries using General Display advertising, comprising 52.2% of the General Display spending.
• Motor Vehicles – Manufacturers was the largest subcategory which comprised 14.3% of the General Display spending.
• Recruitment continues to be the leading category for Classified Advertising expenditure, followed by Real Estate, then Automotive.