Video advertising spend surges on the back of FMCG brand interest

IABStrong interest from FMCG brands has helped video advertising become the strongest performer in the online advertising space with demand for the medium growing 76 percent year on year to reach $196m in the last financial year.

The surge in video advertising comes at an important time for the industry with Nine and Fairfax this week formally announcing their subscription video on demand (SVOD) business StreamCo, Seven and Foxtel rumoured to be launching their own SVOD business and the free-to-air networks next week launching its HbbTV service Freeview Plus, which promises to put catch up television in the homes of millions of Australians.

“The fusion of video advertising with mobile has been transformational for advertisers and publishers alike,” said Alice Manners, CEO of IAB Australia.  “Mobile inventory has been somewhat undervalued, but the cross platform opportunity that video advertising brings to it has unlocked considerable value and potential for both sectors.”

According to the data, authored by PWC and released by the Interactive Advertising Bureau (IAB) today, FMCG brands were the dominant sector in video advertising with 18.2 percent share, more than 2.5 times greater than its 7.2 per cent share of general display advertising.

It is the first time the IAB has included video advertising category data in the quarterly Online Advertising Expenditure Report (OAER).  Together, FMCG, retail and finance accounts for 43 percent of all video advertising.

The data shows that that online advertising expenditure was $4.38bn in the 12 months ended June 30, 2014, with search and directories still the dominant sector with 52 per cent of spend, while 29.2 per cent was spent on general display and the remaining 18.8 percent on classifieds.

The report now puts Australia as contributing around three percent of the global mobile advertising market, with the sector  growing by 349 per cent year on year, to reach $620m for the financial year with the IAB claiming it is now larger than the total magazine market. Search remains the dominant category in mobile advertising, mobile more than doubled its contribution to the general display expenditure year on year.   

“General display is undeniably enjoying a renaissance thanks to the keen interest of FMCG and retail brands in particular,” said Gai Le Roy, IAB Australia’s research director.  “We expect this trend will continue strongly over the coming quarters.”

IAB Members can download the full report from the IAB Australia website.

Nic Christensen


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