online display ads fall for first time

ONLINE display advertising has recorded its first quarterly year-on-year decline in spending since the dotcom crash of 2001, bearing out publisher comments in September that online advertising slowed dramatically in August.

Official revenue figures for the sector show internet display advertising fell 3.8 per cent to $121 million in the three months to September compared with the same period last year.

Classified advertising recorded its third successive drop, falling 5 per cent, but search and directories advertising continued to grow, rising 12 per cent to $238m for the September quarter.

That pushed total online spending up by 2.9 per cent to $466m -- the biggest quarter on record.

The figures support comments from online publishers in September that while August was the low point, as advertisers who had already cut their spending in other media finally reduced their online spending, the sector would quickly bounce back.

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On average, advertising spending declined 8.5 per cent in the June half, according to figures from the Commercial Economic Advisory Service of Australia, while television, newspapers and outdoor all suffered double-digit falls. "Online advertising is taking share from other media," Interactive Advertising Bureau chief Paul Fisher said.

"We're just not immune from the global financial crisis and the impact of that locally." He predicted a return to strong growth in the December quarter.

"October's been very good for a number of the publishers," Mr Fisher said. "It's going to be a strong quarter."

For the first time, the IAB broke out data for performance (cost-per-action or direct response) display advertising, which totalled $27m for the quarter, or 22 per cent of the display advertising total.

That means the performance sector, dominated by players such as Drive PM and Adconion, will be worth well over $100m this financial year.

Mr Fisher said the share of performance advertising was likely to increase.

"It is 58 per cent in the US market, so there is room for that shift to happen," he said.

Online video advertising comprised just 4 per cent of the display market, outperformed by email marketing, which attracted 6.5 per cent.

http://www.theaustralian.com.au/business/media/online-display-ads-fall-for-first-time/story-e6frg996-1225795552557