No surprise says Bonfire’s Cook as Australian digital advertising spend cracks $6 billion

Australian online advertising expenditure is undergoing a significant surge, according to Internet Advertising Bureau (IAB) and Price Waterhouse Coopers.

In the latest IAB Online Advertising Expenditure report, Australian advertisers increased their online spend by 25% in 2015 over CY2014. What makes this news such a milestone is the fact that it’s the fifth consecutive year of double-digit growth for the industry.

Each of the advertising categories measured in the report experienced significant growth over CY2014. Growth was led by general display spend, which rose by 46% in 2015 to $2.1bn. Classified advertising also grew 22% to $1.1bn, while search and directories recorded 14% to $2.8bn.

The news doesn’t surprise Clay Cook (pictured), CEO of Perth digital agency, Bonfire.

“This news solidifies the fact that advertisers have ‘seen the light’ and are investing more heavily in digital as it provides more opportunities to reach consumers. From mobile, to video and display advertising, digital is one of the few forms of advertising that continues to innovate and consistently deliver measurable results.”

eMarketer predicts that in 2017, digital advertising spend will surpass TV for the first time. In the US, TV ad spending will total $72.01 billion, or 35.8% of total media ad spend. While, total digital ad spend will equal $77.37 billion, or 38.4% of total ad spending.

Cook said the surge is likely to continue in the coming years.

“It all comes down to proven results and innovation. Unlike traditional advertising, digital advertising offers unprecedented tools and levels of data to build comprehensive digital strategies and measurable results. We’re continuing to see consumer decision behaviour increase in complexity. Digital is an industry that continues to innovate its advertising offerings and technology to stay ahead of this.”

Just like Remarketing did four years ago, today the digital industry continues to provide new opportunities for advertisers to reach consumers. Mobile advertising and native advertising are two areas taking off in 2016.

In an increasingly “hand-held” world, mobile advertising adoption has skyrocketed in the past few years. Mobile advertising now accounts for 40% of all general display advertising in Australia. Expenditure grew $695 million (81%) in 2015 to reach $1.55 billion. Mobile audience models continue to get more sophisticated and advertisers are now combining behavioral and geolocation signals to find new audiences on mobile devices.

As internet users crave a less intrusive experience, advertisers are delving into native advertising. While increasing brand awareness and engagement, native ads seamlessly blend in to page content and don’t disrupt the user experience. Rethinking the relationship between advertising and editorial has been underway for several years now. However, it will really ramp up for mobile platforms in 2016 due to Apple’s decision to embrace ad-blocking capabilities in iOS 9.

The expenditure trend is likely to grow as the needs of companies and the increasingly sophisticated preferences of consumers continue to dictate the innovation of the digital advertising industry.