Ad Budgets Go Online

Internet advertising growth expected to continue despite recession

The Internet is still a relatively new advertising platform in comparison to traditional media such as TV, radio and print. Many marketers are only just realising the power of internet advertising for reaching markets, communicating with customers and building brands.

The latest report from Frost and Sullivan revealed that in Australia, search is the fastest growing segment in online advertising, reaching $869.7 million in the 2008 calendar year. 75% of advertisers are now spending 10% or more of their ad budget on search compared to 65% in 2007. The ever increasing popularity of search marketing is stimulated by the demand for more cost-effective, measurable advertising.
In a time of economic turmoil businesses redirect their marketing to more accountable, highly targeted advertising media.

New online marketing tools are emerging continuously, contributing to the buzz of having more advertising options and opportunities. Traditional web solutions such as Website Design & Development, Search Engine Optimisation and Pay Per Click, supplemented by Display Ads and Email Marketing, remain at the centre of marketer’s online strategies which are now more commonly supplemented by the newer, more diverse methods of Social Networks and Online Video. The fact that the Internet is the fastest growing marketing medium can be attributed to its vast, flexible and customisable nature.

In 2007 the Interactive Advertising Bureau reported that spend on online advertising in Australia grew 34.5% to $AUD 1.34 billion, continuing a consistent growth trend. Frost and Sullivan’s new figures prove that growth in online ad spend is set to continue despite decreased budgets in difficult economic times.

Australia’s growth in Online Advertising spend reflects similar patterns in the US, which estimates a 24.8% increase in 2008 to $US 21.1 billion, according to research group eMarketer. Despite the slowing of the economy, these figures are expected to climb again with an anticipated $US 25.9 billion figure at the end of 2008.

Currently, expenditure on Online Marketing accounts for around 8.8% of total advertising spend across all media, a number expected to grow to 15.4% by 2012. Of the 8.8%, 40% of that spend is on search marketing, amounting to some $US 10.36 billion. This search marketing component is expected to almost double by 2012, reaching a staggering $US 19 billion. With the United States still seen as the leader of the economic world, patterns will continue to have a flow-on effect in Australia and the rest of the world.

Due to the cost-effective nature of internet advertising, businesses are expected to continue shifting media budgets online. Via online advertising, businesses have an unprecedented ability to track and monitor their marketing budget. The results produced by individual campaigns can be measured. Highly accountable marketing practices mean better marketing efficiency and higher ROI for the business.