Australian expenditure on online general advertising is predicted to reach $2,426 million in 2018, a large increase from the $1,150 million spent in 2014.
The forecast comes from a new Frost & Sullivan report, which predicts the annual growth rate will gradually decline over the next five years to 10 per cent in 2019.
The Australian Online General and Mobile Advertising Market 2014 report reveals online video now accounts for 17 per cent of all online advertising expenditure and is the fastest growing type of online advertising. Spending on online video advertising had a growth rate of 60 per cent during 2013 and 2014.
“Sponsorships, integrated site content and in particular native advertising grew as online publishers increased their range of offerings,” Frost & Sullivan Australia & New Zealand Research Manager Phil Harpur said.
“Also the affiliate online advertising market continues to grow strongly, especially in the online retail, finance and travel segments.”
Social media advertising paid off for more companies in 2014, with 72 per cent reporting a positive ROI as a result of advertising on social media channels. This marks a 9 per cent rise from the results seen in 2013.
EDM/e-newsletter advertising appears to be losing popularity. The report revealed the category saw negative growth during 2013 and 2014, highlighting the growing focus companies have on more effective online advertising solutions.
Mr Harpur said mobile advertising is expected to see strong growth over the next five years, driven by a rise in “consumer media consumption on both smartphones and tablets” and an increase in “targeting capabilities by online publishers and mobile ad networks.”
“Mobile advertising is increasingly being seen as an important part of the overall advertising strategy of both media agencies and brands,” Mr Harpur said.
“Mobile ad networks will need to continually evolve their business models, or their proprietary technology platforms will be superseded by the open nature and technology efficiencies of ad exchanges.”
