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2011 forecast series… Display


2011 forecast series… Display


In the lead up to the release of Marketing magazine’s annual publication for 2012, The Marketing Survival Guide, we’re winding back the clock to the start of last year and sharing the ‘Industry leader’ columns from 2011′s Digital Survival Guide to see just how much has changed, what has stayed the same, and generally what life was like over a year ago across eight areas of digital marketing, continuing today with ‘Display’.

2 Feb 2011 – With the whole online advertising industry having just passed US$2 billion, the online general display sector of the market has grown steadily in recent times and now exceeds half a billion dollars annually. That’s not bad for an industry that some still criticise as ‘unproven’.

Averaging above 10 percent annual growth and with total internet advertising projected by PricewaterhouseCoopers (PWC) to experience almost 14 percent compound annual growth between 2009 and 2013, the display market is likely to be almost $850 million by 2013. No one will be able to label that as ‘unproven’!

Display online advertising is driven by the three largest industry sectors: financial services, automotive, and computers and communications, with these sectors accounting for almost half the entire display category. But this is about to change and the big story over the coming months will be the growing adoption of online as an advertising platform by three new faces: FMCG, retail and, with one federal and at least two state (New South Wales and Victoria) elections this financial year, government. Each of these new sectors currently accounts for a paltry four to five percent each. That’s a mere $20 million a year and we know billions of dollars are spent by these sectors on other media – so there’s lots of scope for budgets to shift online. The online advertising industry has some big questions to answer in the coming months.

The biggest question is undoubtedly, ‘How can I measure online advertising and my ROI?’ and, in the coming months, the industry, driven by IAB Australia and Media Federation Australia, will standardise online audience measurement in Australia and adopt world-leading hybrid measurement methodology. This will once and for all equip marketers and agencies with numbers they know and can trust. Online audience measurement will be people-based and we will largely see the welcome death of unique browsers as a form of measurement. Reach and frequency, the language of media planners, buyers and marketers alike will finally become available, so that all can compare (online) apples with (other media schedule) apples.

The next question is, ‘How does social media work?’ I’d have to say that I don’t have too much to offer you on this. It’s being tackled by the best brains in the industry and many models are, and will, be presented. Yet I think we are quite a way off meaningful and standardised measurement of tweets, fans and likes etc.

I do know, though, that communities will become the key target of advertisers as they seek existing online communities centred on common interests, hobbies, likes, geographies, social networks, brands, sport, parenting, and other entertainment and lifestyle socio-and- psychographics. So the industry needs to work out how a brand enters and engages with an existing community.

The next question is, ‘How does online display impact my search advertising?’ According to the IAB PWC ‘Online Advertising Expenditure Report’, over half of every online advertising dollar is spent in search, so marketers need to be able to see and measure how display advertising affects their SEO and SEM. Stay tuned for the answer – many studies are being done around the world and some Australian studies will be completed and published over the coming months.

Another great question is, ‘How does online advertising uplift my other media?’ This is increasingly important in the channel planning and budget allocation of the $12.5 billion Australian advertising industry. Marketers of beer, shampoo, SUVs, credit cards and holidays want to know what the best combination of media is for their product, their target audience and their campaigns. Some great work is coming out of the UK and US on cross-media impact and measurement, and you can expect that this will continue as TV broadcast businesses and newsprint and magazine publishers look to leverage their combined reach and engagement through their multi-channel media assets.

In my view, rich media and online video content and advertising will emerge as one of the, if not the, most effective formats of display advertising. If marketers are serious about reaching, engaging and influencing their audience online over the coming year, they will need to invest in high impact, well-placed, entertaining and engaging rich media and video formats.

As a side point, it’s worth noting that the quality and effectiveness of Australian-produced online creative is world leading and more investment is needed to develop our burgeoning home-grown creative talent.

Online behavioural advertising will be ubiquitous, contextual advertising, geo-targeting and more micro location-based advertising will grow, as will re-marketing. Privacy will continue to be front and centre of the debate around industry self-regulation versus government intervention.

The important final point is that online advertising growth is down to consumer behaviour. It’s not the technology or the device that’s driving this online advertising revolution and evolution. So, ultimately, the brands that invest in building their strategy and implementation around the views, needs, wants, likes and dislikes of the consumer online will win. It’s that simple.


Paul Fisher

CEO, IAB Australia

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