Online classified advertising rocketed by 30% in 2007 to $396m according to research from Frost & Sullivan.
As advertisers shift spend from traditional print media to online, the research firm predicts revenues will rise to $512m this year with compound annual growth of 25% between 2007 and 2011.
The major factors influencing market growth include the entrance of new advertisers using online and improving yields among existing advertisers.
Employment dominates the online classifieds market, accounting for 47% of revenues and new categories are emerging beyond the traditional sectors of IT and financial services recruitment. Seek is the leader in the market, accounting for 74% of market share. Frost & Sullivan predicts the sector will be worth $504.5m in 2011 with a compound annual growth rate of 28%.
Real Estate classifieds are predicted to grow by 23% over the next four years, resulting in a total of $242.1m in revenues by 2011. This sector is dominated by REA Group which accounts for 71% of market share.
Automotive classifieds are forecasted to compound annually by 27%, reaching a total of $174m in 2011. The market leader, Carsales Group, accounts for 51% of the automotive market.
“The advantages of online classified advertising are steadily driving a structural shift away from print. It’s a trend we expect will gather pace in the next two-to-three years,” said Frost & Sullivan research analyst Darryl Nelson. “However, before anyone leaps in to invest there are some potential dampeners to consider. These include ongoing consolidation among publishers, the continuing lack of internet penetration outside metropolitan areas and the uncertain state of the economy.”
The report was complied through interviews with major and independent publishers and surveys with 100 leading online advertisers.
