Online ad spending to overtake TV in 2013


Online advertising has been the fastest growing medium over the last decade. Advertising spend projections for 2013 confirm this. However, it can be a confusing and daunting process that needs to be put in context with a client’s overall media objectives. Multi Media is able to facilitate online campaigns but ensures that the synergy between offline and online vehicles is balanced. Statistically the majority of online searches are still driven by offline channels. With the number of online options, how do you know your media budget is being spent in the right places? Yes, online is very accountable but is the buy the most efficient it can be? Multi Media facilitates this process ensuring that every dollar is being spent responsibly and is also working hand in hand with a client’s offline campaign.

Below is an interesting article as reported in the Sydney Morning Herald November 26, 2012

Written by Gareth Hutchens

Next year, for the first time ever, the amount of money spent on online advertising is expected to overtake that spent advertising on either newspapers or free-to-air television.

New data from the Interactive Advertising Bureau of Australia shows online ad spending has generated double-digit growth through every quarter of 2012, even while the general advertising market has been softening.

The Online Advertising Expenditure Report (OAER) tracks ad expenditure across online, mobile, and video. It divides the online advertising world into three categories: general display, search and directories, and classifieds. The data shows that, in the three months to September, spending in the online sector grew by 10 per cent, year on year, totalling $813.2 million.

When compared to a recent report from the Commercial Economic Advisory Service Australia (CEASA), it shows the amount of money spent on online advertising is on track to overtake advertising on both newspapers and free-to-air TV in 2013. The CEASA report found that in the first six months of this year, $1.63 billion was spent on online advertising, more than the $1.5 billion spent on newspaper advertising. Roughly $1.65 billion was spent advertising on free to air television over that same period.

The OAER report shows search and directories expenditure grew by 15 per in the September quarter, compared to the September 2011 quarter, while classifieds advertising expenditure grew by 7 per cent, and general display 1 per cent. Search and directories dominated the sector, capturing 53 per cent of total market share, while classifieds grabbed 21 per cent share, and general display 26 per cent.

It also shows $22 million was spent on mobile advertising alone for the three months to September quarter, representing a 190 per cent year on year increase, and a 24 per cent increase on the June 2012 quarter. Video advertising expenditure was $20.7 million in the September quarter, up from $18.5 million in the June quarter.

However, email advertising declined to $5.8 million in the same period, down from $10.5 million in the June quarter. Within the general display sector, the motor vehicle category grew strongly to be the highest spending in the advertising industry this quarter, with finance and real estate sectors the next largest categories.

Retail share of expenditure reached 7.2 per cent of market share, up from 6.5 per cent in the June quarter. In the classifieds sector, real estate, recruitment and automotive were the leading categories. This is the same order as the prior quarter.

It also shows that the most dominant pricing methodology is so-called “CPM,” or cost per thousand impressions. Under the CPM model, an advertiser will pay for every thousand times that her ad appears on a screen. If the CPM is $10, the cost per impression will be $0.01. CPM accounts for 62 per cent of general display advertising expenditures, while 38 per cent is “direct response based.” The direct response based model may include any ‘pay per click,’ ‘pay per sale,’ ‘pay per action,’ or ‘pay per lead’.