Online advertising still growing, but not classifieds
Online advertising held-up well in the first three months of 2009, despite another flat quarter for online classifieds.
Overall spending for the quarter was $439.5million according to the latest quarterly estimates from the Internet Advertising Bureau (IAB).
This was a slight drop (5%) on the total $462million spend estimated for the December quarter.
But there is usually a seasonal drop in spending from the December to the March quarters. So the relatively small drop this year suggests that the
local online economy is holding up much better than it is in other parts of the world.
“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 search and directories sectors experienced positive growth and the classifieds sector saw only a minimal decline is encouraging in the current climate.”
Also encouraging are the figures for online display advertising which, although it fell 16% in the March quarter, was still significantly up on the same quarter a year earlier.
Indeed, at $110million, online advertising was up 16% on the $95million recorded in the first three months of 2008.
According to the IAB, the weaker performance of online display advertising reflects the types of industries who spend most heavily on display.
The finance, computers & communications and motor vehicles industry account for just under half of all online display advertising and they have all been hard hit by the recession.
A similar situation confronts the industries that have traditionally accounted for online classifieds, namely recruitment, real estate and automotive.
Each of those industries has experienced big falls in demand, such that spending in the latest quarter at an estimated $105million, was slightly less than the $107million recorded for the same quarter last year.
This may be bad news for shareholders in high-profile ASX listed companies specializing in online classifieds such as Seek and Realestate.com.au.
Businesses like Carsales.com.au, too, which had been hoping to go public, may also have to again defer their listing plans.
Google, however, is continuing to show strong growth in revenues with the IAB’s latest figures suggesting no drop in spending from the last quarter of 2008 through to the first quarter of this year.
At $225million for the latest quarter, search & directories spending is up almost 23% on the spending estimate for the first quarter of last year.
Google accounts for the great majority of that spend, indicating that local advertisers are continuing to find paid search marketing a compelling proposition.
For more information go to
www.iab.com.au
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