THE internet advertising industry continued to experience double-digit growth last financial year despite a slowdown in the online classified market.
Figures released by the Interactive Advertising Bureau showed ad spending for the 12 months to June topped $1.8 billion, an increase of 18.5 per cent compared with the previous year.
But growth in the second quarter of 2009 slipped below 10 per cent as the global financial crisis hit ad revenues.
At the same point a year earlier, the internet advertising industry reported revenues of $1.199bn and growth of 54.2 per cent on the previous financial year.
The continuing overall growth was in stark contrast to other media, including TV, radio, outdoor and newspapers, whose revenues have been savaged by the economic slowdown. It also defies trends seen by the industry overseas where the US and Britain are predicting negative growth or stagnation in those markets.
The figures, compiled by PricewaterhouseCoopers, revealed search and directories remained the biggest contributor to online revenues, accounting for 49 per cent of the total, or $883.5 million. Search and directories grew by 25 per cent for the full year, while the second biggest market, general display advertising (which comprises 27 per cent of the total), experienced 19.6 per cent growth to $491m.
Classifieds, which account for 24 per cent of the market, grew by just 6 per cent annually to $431m, but experienced a drop of 6 per cent in the second quarter this year compared with 2008.
"Real estate became the leading category for classified advertising expenditure in the second quarter 2009 (moving up from the second position), with recruitment dropping to the second position (decreasing from the leading category in the previous quarter)," the report said.
IAB chief Paul Fisher admitted growth had slowed dramatically over the first six months of the year, but said the strength of the financial year figures had shown the strength of the industry.
"Given the challenges of the past eight months since the GFC impacted on the Australian media economy, any growth is welcome," Mr Fisher said.
"The latest revenue figures demonstrate the continued confidence marketers and agencies have in online as an advertising medium both when times are good and when times are tough.
"Search continues to drive the growth in the industry, with display advertising also well supported. Unsurprisingly, online classifieds advertising has been impacted by declines in the employment, real estate and automotive markets."
Mr Fisher predicted the industry would reach $2bn in revenue this calendar year and said there was already evidence of improved conditions.
"The continued growth of online advertising expenditure, coupled with anecdotal increases in online advertising activity already this quarter, position the industry strongly," he said.
The latest figures also showed the government sector was increasing its online advertising activity, with its share of the general display market in the first six months of 2009 increasing from 2.7 per cent last year to 4.5 per cent.
IAB said the dominant industries in display advertising were finance, computers communication and automobiles -- between them accounting for more than 45 per cent of all advertising.
