Video advertising has been confirmed as the industry darling for FMCG, retail and finance brands, growing 76 percent year on year to reach $196m for the financial year ended 30^th June 2014.

FMCG is the dominant industry in video advertising with 18.2 percent share, more than 2.5 times higher than its 7.2 percent share of general display advertising, according to video advertising category data included for the first time in IAB Australia’s quarterly Online Advertising Expenditure Report (OAER).  Together, FMCG, retail and finance accounts for 43 percent of all video advertising. This is ahead of metro TV advertising, where these three sectors account for 40 percent of advertising.

The report compiled by PricewaterhouseCoopers (PwC) is based on submissions from publishers and estimates of Google and Facebook, notes that online advertising expenditure was $4.387 billion in the 12 months ended 30 June 2014, a 22 percent year on year growth.

Of this expenditure, 52 percent was attributed to search and directories, 29.2 percent to general display and the remaining 18.8 percent to classifieds.  Display advertising again reported the strongest growth for the period, increasing 34.2 percent year on year, while classifieds grew 17 percent and search and directories grew 17.9 percent.

Mobile advertising also grew strongly to reach $620m for FY14 and is now larger than the total magazine market. While Search remains the dominant category for mobile advertising, mobile more than doubled its contribution to the general display expenditure year on year.   Australia now contributes around three percent of the global mobile advertising market.

“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.”

In the June quarter 2014, total online advertising increased eight percent from the prior quarter, to reach $1.185m.  Expenditure increased across the three categories, with general display experiencing its strongest growth ever at 17.9 percent on the March 2014 quarter, while search and directories increased 3.8 percent and classifieds increased 5.6 percent compared to the immediate prior quarter (March 2014).

“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.”

Motor vehicles, finance and real estate continue to be the top three dominant industry categories for the financial year 2014, representing 39.7 percent of the reported general display advertising market. Retail was however the big mover for the financial year, increasing its category share from 7.6 percent to 9.1 percent and its expenditure share by 1.5 percentage points.

The OAER is supported by the most recently released CEASA report which reported that digital advertising has increased to 31 percent of all advertising spend, continuing ahead of both free to air television and newspapers.