Display, mobile and video advertising drive 2018 online ad spending, IAB finds

Australian digital advertising revenue touched $2.1 billion in the first quarter this year despite a seasonal drop in overall revenues, the IAB and PwC found in Online Advertising Expenditure Report released this morning.

The survey reported total year on year revenues had gone up 13%, driven by stronger display, video and mobile advertising. However, compared to last quarter, spending dropped 3.5% following the traditionally strong Christmas period.

IAB Australia’s Gai Le Roy: “We fully expect mobile and video advertising continue to surge.”

Driving the gains were general display advertising which grew 20.3% over last year along with the smaller video and marketing categories which grew 38 and 39% respectively. The survey also found marketers are shifting spending away from classifieds, search and directories.

“Our market is chameleon-like, mirroring the significant shifts in consumer behaviour towards mobile and video, so it’s little surprise to see an increased investment in these formats,” said Gai Le Roy, IAB Director of Research.

Of the13% year on year growth,  PwC found classifieds increased 11.2% while search recorded 8.8% gains.  Within the general display category, video advertising touched $320 million for the quarter, representing just under half – 42 per cent – of the sector.

Comparing Australian spending to international markets, the report claimed the local industry’s spend more closely resembles the UK than either the US or New Zealand with display advertising representing 36% of ad spend locally compared to 35% in the UK and 50% of ad spend in the US.

A similar pattern was found in video advertising with its share of Australian online advertising being 38%, in line with the UK’s 39%, both significantly higher than 29 percent of the US spend and New Zealand’s 23%.

Of the industry categories, auto advertisers continue to be the biggest spenders in digital display advertising with 18.3% share of spend. The FMCG industry is increasing its spend and its 12.2% share is now the largest advertiser category for video marketing.

The IAB’s Le Roy says she expects the growth of video advertising continue while the classifieds and directories decline in a market estimated to be just over half of the $15.6 billion market in 2017.

“While it’s likely we will see a continued softening in some of the more established digital ad revenue streams, we fully expect mobile and video advertising continue to surge as marketers explore and challenge the possibilities of digital to build trust and reputation for their brands.”


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