Carsales spearheads growth slump for online classifieds

The growth rate of online classified advertising halved last year, falling from 16% in 2011 to 8% in 2012, led by a drop in automotive classifieds.

B&T Magazine
Posted by B&T Magazine

Online classifieds for the automotive industry slowed from 14% in 2011 to 5% in 2012 due to reduced growth from market leader, Carsales, and market consolidation, according to new figures from Frost & Sullivan.

The employment sector’s growth also dipped and will be constrained by the growth in alternatives to paid job listings, such as direct candidate search or use of social media to source candidates, going forward.

From 2012 to 2016, the employment classifieds sector is predicted to grow at a modest compound annual growth rate of 3.7%.

According to Frost & Sullivan, LinkedIn’s social aspect and large network of professionals which can be easily targeted according to job category or other characteristics, makes it an attractive platform to target passive candidates. Further market penetration by LinkedIn could potentially impact mainstream online employment websites.

Downward pressure on online classifieds ad pricing, combined with a lower growth of ad volumes due to a relatively mature market also contributed to the drops.

Overall market growth is expected to reduce to 5% by 2016, with a compound annual growth rate of 6.5% predicted for the 2012 to 2016 period. The total market is expected to be valued at $1.011bn by 2016. 

The online real-estate classifieds market is  predicted to display the highest average growth with a compound annual  growth  rate of just under 10% for the period between 2012 and 2016.

Phil Harpur, senior research manager, Australia & New Zealand ICT Practice said: “The real estate sector has proven  relatively  resilient  with  online classifieds revenue growth increasing  from  15%  to only 18%. Market leaders REA and Domain performed strongly. The  relative  strength  of  this  sector is due to a reasonably strong  property  market,  coupled  with  greater  take-up  by customers of premium  or other added-value services which have increased average revenue per user.”

According to Frost & Sullivan, delivery of online  classifieds  advertising through mobile channels will grow  strongly  in  line with the increasing uptake of mobile devices; both smartphones and tablets.

“The immediacy aspect of mobile sites enables and encourages consumers to visit online classifieds sites frequently. Consumers increasingly use multiple mobile devices to view online sites and other websites in verticals such as auto and real estate,” said Harpur.

“To capitalise on this new technology and create competitive advantage, many leading Australian classifieds publishers including Carsales, REA and Seek are now spending significant amounts on mobile platform research and development” Harpur elaborated.