Australian advertisers spent $1,731m on online advertising for the quarter ending March 2016, an increase of 33.5 percent year on year, according to the latest IAB/PWC report.
As always the giant qualification is that the numbers are made up. Google and Facebook who capture the lion’s share of the revenue do not provide their data, so estimates are applied.
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The IAB tends to be fairly … diplomatic … about the primacy of Google and Facebook, given the sensitivities of its other members. So before we get to the latest local data, here’s a few little factoids to consider as context. (And thanks to Derek Laney, Head of Product Marketing, Asia Pacific, Salesforce who provided this information to Which-50 yesterday in another context.)
- In the US, Morgan Stanley estimates that 85 per cent of all the new online advertising dollars went into the pockets of Google and Facebook (and remember Facebook is still under represented in the Australian market in terms of its revenue share.)
- Again in the US, mobile represents a clear majority of people’s digital time (and the trend is moving that way down under)
- Most of that mobile time is spent in apps, and mostly in the same few apps.
- For instance Australia there is a suggestion that the Facebook and Instagram combo captured a third of all local mobile minutes in Q1 (We are still seeking verification)
None of which augurs well for any publishers beyond the emerging Google/Facebook duopoly.
Back to the numbers
Still, lets see what the IAB and PWC estimates of the Australian online advertising market suggest.
According to the report, mobile advertising is closing in on a majority of the general display advertising, while video advertising accounts for over 25 percent of general display.
The study’s authors say that mobile advertising expenditure increased to $507.8 million in the March quarter 2016, with 57 percent of mobile ad expenditure attributed to mobile display and 43 percent to mobile Search.
“The total expenditure comprises general display and search, as well as mobile video advertising and is based on participants’ data, industry estimates for Google’s mobile display and search revenues, Twitter’s mobile display revenues and Facebook’s mobile display revenues,” according to an IAB release.
Not surprisingly the quarter on quarter numbers where subdued following the peak Christmas season.
Year on year however, general display advertising demonstrated strong growth of 46.7 percent for the March quarter, driven by mobile and video growth. Search and Directories advertising recorded an increase of 29.9 percent year on year, while Classifieds grew 20.8 percent year on year for the March quarter according to the report.
Video display advertising contributed 25.3 percent of general display expenditure. The interesting point is that video has not improved its share much in the last 12 months in general display.
“FMCG continues to lead video advertising, with motor vehicles and retail rounding out the top three industry categories for video advertising and representing 46.5 percent of the report video display advertising market. Indeed FMCG is overly represented in video Display advertising compared to General Display, with a 25.5 percent share of spend in video Display, more than three times its 7.3 percent of share in total General Display.”