re: ------> ansearch More advertisers choose net
By Julian Lee
Sydney
April 12, 2005
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"New media" pose a serious challenge to traditional media as the proportion of ad money going online keeps growing.
The online advertising market grew more than six times faster than the overall ad market last year to hit $388 million, for the first time eclipsing its nearest rival, the outdoor ad industry.
Advertisers spent 64 per cent more online than in the previous year, making it the fastest-growing media, according to the latest revenue figures supplied to the Audit Bureau of Verification Services. Figures due out later this week are expected to show that the total ad market grew by 10 per cent to $9.1 billion.
The statistics also show definitively that "new media" is posing a serious challenge to traditional older media such as radio, magazines and, to a lesser extent, newspapers and television.
The amount spent on banner ads, classifieds and sponsored links through search engines was $61 million more than on posters, street furniture and buses and taxis, which last year claimed $327 million of the total ad market. Online has already overtaken radio in ad revenue in Britain and the US.
Publishers are hailing the figures as a milestone in the industry's recovery since the dark days of the dotcom boom, when budgets shrank along with the online ad market.
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AdvertisementNinemsn, the joint venture between Microsoft and Publishing and Broadcasting Ltd, says more mainstream advertisers are going online to launch products and services. "The list of (our) top 25advertisers used to be dominated by online businesses but now they are the same as those you would find on the TV schedules," ninemsn chief executive Martin Hoffman said. McDonald's, Pfizer, Procter & Gamble and fast food chain KFC were all new advertisers online in the past year, he said.
Eleven million Australians are now online and 60 per cent are expected to be broadband users by the end of the year. An Australian study conducted last year by mobile phone operator Ericsson found the number of hours spent online weekly jumped from 17 to 23 when a user moved from dial-up to broadband. Although the finance category continues to be the biggest spender, pumping $31 million into the medium last year, according to ABVS' 2004 Online Advertising Expenditure Report, the amount spent by advertisers of fast-moving consumer goods leapt from $1.9million to $4.7 million.
"It's really brought home the fact that online is becoming an established medium," said Nic Cola, commercial director of Fairfax Digital, the online arm of John Fairfax Holdings.
The online market is split three ways: display (including banner ads, sponsorship); classifieds; and search, where an ad is served up in response to a query through a search engine. Search had the largest growth in ad revenue, rising 85 per cent to $127 million.
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