Online ad spend boom Down Under

Cheers Elizabeth Lloyd at imedaiconnection for this rundown on the state of affairs in the Australian online ad space

The latest figures show Australia has a bright future, both for online advertising opportunities as well as broadband subscriber growth.

According to the International Telecommunication Union, 74.3 percent of Australia's population is online -- out of 20.6 million inhabitants, 15.3 million are online (as of December 2007). With statistics like this, it is no surprise that Australia is one of the top 20 countries with the highest number of internet users.

What is interesting to note is how the internet has changed Australia's traditional media use. The World Internet Project in July 2008 published a report titled "CCi Digital Futures Report: The Internet in Australia" detailing:

• For users, the internet is now their most important source of information. Just under seven in ten users described the internet as 'important' or 'very important' compared to a third for television and less than a half for newspapers or radio. Internet users spend less time watching television, listening to radio and reading newspapers than nonusers.

Advertisers are starting to notice the shift from traditional to digital media -- it is evident in the rising online advertising expenditure. With growing internet penetration rates (in just eight years the number of online users has more than doubled), online advertising expenditure in Australia has showed record quarters. The Interactive Advertising Bureau (IAB) Online Advertising Expenditure Report, which was published in June 2008, states:

• Online advertising expenditure in Australia for the second-quarter of 2008 totalled A$412.5 million, the largest second-quarter recorded. This is an increase of $28 million (or 7.3 percent) from the first-quarter of 2008, and is an increase of $87 million (or 26.7 percent) from the second-quarter of 2007.

What has contributed to increased penetration rates and the shift to digital media for information consumption is growth in the broadband market. The Organisation for Economic Co-operation and Development (OECD) reports that 22.8 percent of Australia's population falls in the broadband subscriber category (as of September 2007) -- just under four in five home connections are broadband.

Broadband does make a substantial difference to peoples' use of the internet. "The internet is more highly valued by those with broadband connections and they use the internet for longer and for a greater variety of purposes. Younger people have been quick to integrate the internet into their lives, they use the internet more and particularly for entertainment," according to the CCi report.

The internet is widely embraced in Australia. However, a digital divide does exist as a fifth of the population has never used it. With or without broadband, internet use varies greatly between different groups. The CCi report has found that "men, students, employed persons, younger people, higher educated and higher income individuals are all more likely to use the internet than women, retired people, home-makers, older people, lower educated and lower income individuals".

Aside from the demographics, what is interesting to note is the type of online media that is receiving the most attention. The IAB report cites that:

• The largest online advertising expenditure was search and directories, which comprised of 45.3 percent, while general display advertising and classifieds advertising accounted for 27.8 percent and 26.9 percent of the total advertising expenditure for the second-quarter of 2008, respectively. Finance, computers and communications, and motor vehicles sectors continue to be the dominant industries using general display advertising, and comprise over 50 percent of the general display spending.

Marketers take note of the online user demographics as well as the dominant sectors in all forms of online media. It is evident that Australia has a very promising future -- both for online advertising opportunities, as well as broadband subscriber growth. Not only does the number of broadband users increase, but online advertising expenditure statistics are very impressive.

Elizabeth Lloyd is co-founder and chief revenue officer, 9Global, Inc.