Growing Pains for Australian Online Ads

• Posted: Wednesday, May 30, 2007
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• Author: pradhana
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• Filed under: Ad Spending, Internet Advertising, Online Advertising

Some ads annoy Aussies.

Australian online ad spending increased by 40% in 2006 and will grow another 30% in 2007, according to projections by the Commercial Economic Advisory Service of Australia (CEASA).

The country's online activity is strong overall. Nearly two-thirds of Australians are now Internet users. Adoption is particularly high among younger Australians, with 90% of 12-to-14-year-olds using the Internet for schoolwork. Australian consumers also spent $8.5 billion shopping online in 2006.

Amid this surge, Australian online ads accounted for 8.3% of the country's total ad spending. The CEASA expects online advertising's share of total ad spending to grow to 10% in 2007, or $801 million. While spending is up in all segments of online advertising, the fastest-growing area is search advertising.

Frost & Sullivan is even more bullish about the growth of online advertising in Australia. In a report released in February 2007, the consulting company estimated Australia's online ad market grew by 62% in 2006, to A$1.01 billion ($759 billion), and it predicted spending will hit A$2.95 billion ($1.93 billion) in 2010.

As in much of the rest of the world, paid search is the fastest-growing segment. Australian paid search revenues grew by 105% in 2006, according to Frost.

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