Mobile advertising in Australia surges 220 per cent in 2012: IAB

Mobile advertising, which is measured as a subset of general display and search expenditure, achieved growth rates reminiscent of the early days of online advertising, said IAB's report. Coming off a low base, the total expenditure for mobile advertising for the three months ended 31 December 2012 was 55 per cent over the previous quarter, reaching $35 million.

Based on submissions from publishers, 58 per cent of mobile advertising for Q4 2012 was allocated to smartphones and 42 per cent was for tablets. General display dominated mobile advertising spend, garnering 56 per cent of the pie, while 44 percent was search.

The report, which is compiled by PwC, found that overall online advertising expenditure in Australia reached US$3.4 billion in 2012, an 18 per cent increase on the year before. 

All three sectors likewise grew year on year, with general display up 10 per cent; search and directories up 27 per cent; and classified advertising up by nine per cent. 

On a quarterly basis only classifieds advertising declined slightly in Q4 2012 from Q3 2012. As a whole, online advertising expenditure reported an 11 percent increase over the previous quarter to reach $925 million for Q4 2012.

Motor vehicles, finance and real estate dominated general display advertising, but retail and FMCG showed the biggest increases in expenditure.

“The inexorable rise of mobile, video and search is showing little sign of abating," said Gai Le Roy, director of research for IAB Australia. "While mobile is currently experiencing a surge, we expect it will settle into strong and sustained growth rates, just as general online advertising expenditure did in 2000 after an extraordinary period of growth.”

For online advertisers, CPM remains the dominant pricing methodology, increasing to 63 per cent of general display advertising expenditures, with 37 per cent being based on direct response.

General display advertising accounted for 26 per cent of all online advertising, classifieds advertising accounted for 20 per cent and search and directories advertising accounted for 54 per cent, based on expenditure for the past 12 months.