Online ad sector resists general advertising downturn, says IAB

Online advertising has continued to climb in Australia despite the general downturn in the market, says the IAB Australia in its latest survey of the local market.

The report, prepared by PwC for IAB Australia, found online ad revenues increased 4.9% year on year to reach $2.2bn for the first quarter of 2019.

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PwC’s data showed video, mobile and classified advertising were the stand-out performers, increasing year on year by 15%, 26% and 7% respectively.

The performance of the online sectors is in stark contrast with the rest of the industry. The Standard Media Index, which measures advertising booked through media agencies, reported an overall year-on-year fall of 4.7% in March with Ooh Media CEO Brendon Cook warning of double digital falls in April’s figures.

While the year-on-year measure was good, online spend in the first quarter of 2019 followed the seasonal pattern of softening slightly compared to the more active final 2018 quarter with a 4.3% overall fall.

Compared to the previous quarter, general display and search and directories segments contracted, while classifieds grew 6% in the March quarter 2019 compared to the December 2018 quarter. This classifieds growth was experienced across all three reported sectors – recruitment, real estate and automotive.

Gai Le Roy, CEO of IAB Australia said the market is tough at the moment, but there are bright spots.

“There is little doubt that the advertising market is tough across all platforms, but within the breadth of digital advertising there were still bright spots. The classifieds sector again had a strong March quarter and the display market saw an increased share for government/political spend which will continue into the June quarter numbers. Yet again video continues to gain share in the display sector,” she said.

Search and directories maintained its overall share of online advertising expenditure at 44% to reach $977.6m for the quarter, while classifieds reached $426.2m, a 20% share of spend, and general display advertising is now 36% of spend at $799m.

Video represented the largest share of general display expenditure in the March 2019 quarter at 46%, followed by content, native and infeed at 35%, and standard display formats at 18%. Each of these segments has a component of mobile advertising expenditure with mobile advertising making up 66% of total general display expenditure, an increase from the December 2018 quarter.

Media agencies were the preferred buying method for display advertising viewed on content publishers’ inventory with some 58% bought via media agencies via an IO / non-programmatic method.

29% of general display advertising was bought programmatically with 6% through either fixed CPM and guaranteed inventory or 23% with a variable CPM based on real-time bidding via an exchange or private market place. The share of general display advertising bought programmatically decreased 5% compared to the prior quarter.

The report also found that 32% of video advertising expenditure for content publishers was driven by viewing via a connected TV in the March quarter, with 39% viewed on a desktop and 29% via mobile.

Automotive, real estate and finance lead the general display advertising market revenue, representing 37% of the reported general display advertising market for the March quarter. The same three industry categories made up 33.4% of general display in the December 2018 quarter. Government’s share of general display increased to 5.0% from 3.1% in the lead up to the May 2019 federal election.


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