Online Advertising Spend Reaches Record $6.8 Billion In 2016 Financial Year

Online Advertising Spend Reaches Record $6.8 Billion In 2016 Financial Year

The Australian online advertising market has again delivered robust double-digit growth increasing $1.6 billion to reach $6.8 billion for the full financial year ending June 30 2016, a 29.7 per cent increase over the prior financial year. This represents the fastest year-on-year growth in online advertising over the last five years.

Karen Terranova
Posted by Karen Terranova

The data from the latest IAB/PWC Online Advertising Expenditure Report reveals that double digit growth was achieved by all online advertising segments during the financial year.

General Display posted the largest increase at 43.3 per cent – the highest year-on-year growth since the inception of the report – comprising $2.5 billion of the $6.8 billion market. Classifieds experienced a 21 per cent year-on-year growth to reach $1.2 billion, and Search and Directories grew 24 per cent to make up $3.1 billion of the market.

“Another year of double-digit growth, driven by the continued rise of the mobile and video category, means that online advertising heads closer to half of all advertising spend,” said Vijay Solanki, CEO of IAB Australia.

“It’s brilliant to see Real Estate along with the Automotive, Retail and FMCG categories lead the way.  They have built capability across all digital platforms especially in mobile and video.  They know how to use content, technology and data to help achieve their marketing goals efficiently.”

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Mobile grew to $1.96 billion of the total market, continuing an impressive upward trajectory to grow 72 per cent on the previous year. Mobile expenditure was split between Search and Display at 43 per cent and 57 per cent respectively, with 67 per cent of the spend going to smartphones and 33 per cent to tablets.

Video advertising (mobile video advertising is included in the mobile display category) grew 55 per cent from the prior year’s $388 million to reach $600 million for financial year 2016. It now makes up 24.3 per cent of all General Display advertising expenditure, up from 22.5 per cent in financial year 2015.

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Real Estate advertising saw the largest share in growth year on year, increasing its category share to 13.2 per cent, compared to 10.8 per cent in the previous year.  Motor Vehicles remained relatively stable and accounts for the largest category share at 17 per cent for the year, with Retail the third largest category at 10.4 per cent, up from a 9.2 per cent in the previous year.

“The uptick in the Real Estate category is illustrative of an industry that is leading the way in its use of targeted content, personalisation, optimisation in order to lead digital engagement in today’s disruptive environment,” noted Solanki.

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