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Australia’s online advertising market show’s strong positive growth, recording impressive year-on-year growth of 14 percent according to figures released by IAB Australia. According to its Online Advertising Expenditure Report (OAER) which is compiled by PricewaterhouseCoopers (PWC), online advertising expenditure in Australia for the first-quarter 2009 (ending 31 March 2009) totaled $439.5 million, the largest first-quarter on record.

As expected, the online advertising industry has been impacted by the effects of the global financial crisis; with Q1 showing a drop of five percent from Q4 2008. However, unlike most other advertising media that are reporting negative year-on-year revenues, online advertising has maintained strong year-on-year growth each quarter.

Combined with the record 4th and 3rd quarters of 2008, the results show an impressive 22 percent growth when compared to the same quarters the previous financial year. The report demonstrates a growing confidence in the online platform as a trusted, core and in some cases essential component of advertisers marketing and communications strategies.

“Much will be made of the decline in revenues from Q4, but it’s important to note that historically Q1 online advertising revenues are always either flat or lower than Q4 in the online advertising industry,” said Paul Fisher, CEO of IAB Australia. “The fact that both the general display, and search and directories sectors experienced positive growth and the classifieds sector saw only a minimal decline is encouraging in the current climate.

“Continued economic pressure on some of the key advertising industry sectors notably automotive, financial services, travel, and in the classifieds sector real estate, employment and automotive, resulted in these sectors dampening the previous rate of growth in the industry.

“However, as the online advertising industry develops new and improved audience measurement metrics and methodologies, more standards and guidelines specifically for the Australian market, and Australian based research and case studies, the industry is well placed to continue its strong, double digit growth for many quarters to come, especially when the Australian advertising industry begins its recovery from the current downturn,” continued Mr Fisher.

PwC lead partner for technology, entertainment and media, David Wiadrowski said: “The impact of the economic slowdown has strongly impacted the Classified market during the quarter, with the first decrease in year-on-year expenditure seen since record keeping commenced in 2002. The decrease in the General Display market from the previous quarter was to be expected, with the decrease showing a similar result to the trend of previous years.”

An expected migration of revenues into search and directories saw this sector pushing past 50 percent of total online advertising revenue for the first quarter. General Display advertising and Classifieds advertising accounted for 24.9 percent and 23.9 percent of the total advertising expenditure for the first-quarter 2009 respectively.

Finance, Computers & Communications and Motor Vehicles sectors continue to be the dominant industries using General Display advertising, and comprise 46 percent of the General Display spending. Motor Vehicles – Manufacturers was the largest subcategory which comprised 12 percent of the General Display spending for the quarter.

Recruitment continues to be the leading category for Classified Advertising expenditure, followed by Real Estate, then Automotive.

The IAB Online Advertising Expenditure Report includes financial data from over 1,000 websites. An executive summary of the Report is available on the IAB Australia website. The full report is made available to IAB Australia members and report contributors only.