Revenues for Australia’s online classified advertising market reached $396 million in 2007, an increase of 30 percent over the previous calendar year according to new research released by global growth consulting company, Frost & Sullivan.

The study predicts online classifieds revenues will rise to $512 million in 2008 and forecasts compound annual growth of 25 percent between 2007 and 2011. The major factors influencing market growth include the increasing adoption of the medium by new advertisers and improving yields among existing advertisers.

The Australia Online Classifieds Advertising Market 2007-2011 report involves interviews with major and independent publishers and surveys with 100 leading online advertisers. It includes in-depth analyses of the three leading segments:

• Employment
• Automotive
• Real estate

Employment dominates the online classifieds market, accounting for 47 percent of revenues. Significantly, online job advertising is starting to show a definite move into new categories, expanding beyond the early adoption sectors of IT and financial services recruitment. Seek remains the clear sector company leader, attracting 74 percent of market share.

Marked growth in commercial real estate listings is a major contributor to expansion in the real estate sector over the past 12 months. The study forecasts that be 2011 total revenues will equal $242.1 million. Currently, the sector is dominated by REA Group, which accounts for 71 percent of market share.

Automotive classifieds also continue to increase with revenues set to compound annually by 27 percent, reaching a total of $174 million in 2011. However, the research shows that dealers appear to be approaching advertising overall with some caution, possibly as a reaction to slowing consumer confidence. The market leader, Carsales Group, accounts for 51 percent of the present total automotive market.

Across all sectors, advertisers cited a range of benefits flowing from online classifieds including increased lead generation, an increased return on advertising investment, and faster speed to market.

“The advantages of online classified advertising are steadily driving a structural shift away from print. It’s a trend we expect will gather pace in the next two-to-three years,” notes Frost & Sullivan research analyst, Darryl Nelson. “However, before anyone leaps in to invest there are some potential dampeners to consider. These include ongoing consolidation among publishers. the continuing lack of internet penetration outside metropolitan areas and the uncertain state of the economy.”