Online Advertising Trends in Australia

It is predicted that Australian businesses will spend around 3.79 billion USD on online advertising in 2018, and more than half of that spending will come from desktop-focused ads. By  2022 however, 60% of the total revenue will be generated through mobile devices, according to the latest Digital Market Outlook report by Statista.

There are many channels of online advertising including banner ads, PPC or search engine ads, social media advertising etc. But search engine ads are the most popular online advertising medium in Australia, with a market volume of about 1.85 billion USD.

Below we take a closer look at different types of online advertisements and their market growth.

1. Search Engine Advertising

Search engine advertising includes ads that appear on the search engine result page next to organic search results for targeted keywords. They are the most used digital advertising medium in Australia in terms of revenue.

• Projected revenue in 2018: 1.85 billion USD
• Projected revenue in 2022: 1.92 billion USD
• Compound annual growth rate: 1.0%

Revenue per Australian internet user is 88.76 USD for these ads.

2. Banner Advertising

Banner ads are displayed on websites and inside mobile apps, and can also appear as pop-ups. Apart from text and images, these ads may contain sounds and animations. Banner ads are often run through search engine ad platforms like Google AdWords.

• Projected revenue in 2018: 0.62 billion USD
• Projected revenue in 2022: 0.94 billion USD
• Compound annual growth rate: 11.2%

Revenue per Australian internet user is 29.62 USD for these ads.  

3. Social Media Advertising

Social media ads are paid-advertising through Facebook, Twitter, LinkedIn or other social platforms.

• Projected revenue in 2018: 0.59 billion USD
• Projected revenue in 2022: 0.73 billion USD
• Compound annual growth rate: 5.4%

Revenue per Australian internet user is 28.55 USD for these ads.

4. Video Advertising

There are two types of video advertising.

Video segment ads:
These ads appear in a video that the user is watching on a web or app-based video player. For example, YouTube videos often show an add before the actual video begins. The ad can also appear at the end or in the middle of the video stream.

Overlay ads:
These are text or image-based ads that appear as overlays on the top of a video that the user is watching.

• Projected revenue in 2018: 0.50 billion USD
• Projected revenue in 2022: 1.05 billion USD
• Compound annual growth rate: 20.2%

Revenue per Australian internet user is 24.25 USD for these ads.

5. Classified Ads

Classified ads are display ads or business listings that are posted on specific sites. Though many classified ad sites are free to use, there are also premium sites that require businesses to pay.

• Projected revenue in 2018: 0.22 billion USD
• Projected revenue in 2022: 0.27 billion USD
• Compound annual growth rate: 4.6%

Revenue per Australian internet user is 10.75 USD for these ads.

You can download the Statista Digital Market Outlook report to get more details.

Global Comparison of Online Advertising

According to the latest IAB Global Online Expenditure Report, digital advertising constitutes 51% of the total ad market in Australia. Businesses here are more dependent on online ads than in US (39%) and New Zealand (41%).

IAB classifies online ads in 3 groups:

1. Search engine ads
2. Classifieds
3. Display ads (including video)

Here’s a chart that shows how ad spending is distributed among these groups in Australia, and three other countries:

We can come to several conclusions from this chart –

• Search engine ads are the most popular form of online advertising
• Classifieds are quite strong in Australia, compared to the US
• The Australian market has more in common with the UK than with US or New Zealand

Australia’s similarities with UK are also evident in the video ad segment. 38% of display ads in Australia contains video. The rate is 39% in UK, but only 29% in US.

Takeaways

More than half of the advertising expenditure in Australia goes toward digital ads, and this market share increases each year.

So, almost every type of business will require an online marketing strategy to remain competitive in the future. Here are some key points that are worth mentioning;

• Video ads are growing more rapidly than other online advertising methods. If you have a large enough budget, your company should invest in making video advertisements and distributing them through online channels like social media and YouTube.
• Your online advertising strategy should focus equally on desktop and mobile. Though as of 2018 desktop devices are still ahead, by 2020 mobile devices are set to take over.
• Search engine ads (including PPC) should be the primary focus of any online advertising strategy. They constitute about 45% of online ad spending in Australia. The continuing popularity of search engine ads over the years is proof of their effectiveness.