Ben Shepherd: The latest IAB/PWC figures are out and the sentiment is very positive.
In Q3 of 2008, total online spend on advertising was $451m – up 30% YOY (from $348m Q3 2007) and up 9% on Q2 2008.
All categories contributed to the growth, Display, Classifieds and Search. Display was up 29% YOY, Search 33% YOY and Classifieds up 25% YOY.
When you look at quarter on quarter growth the picture is a little different.
Search was up 9% Q2 to Q3 to $212m for Q3. Display was up 10% to 126m. Classifieds was only up 2% Q2 oto Q3 to 114m.
For display advertising these quarter on quarter figures are a triumph. It outpaced the market in terms of growth, gaining ground on search for the first time in a long time.
For classifieds it signals the start of more bad news to come. Seek today forecast zero profit growth for this fiscal year and the next 6-12 months will hit the main classifieds operators hard as the job, auto and real estate markets flatline.
Display was definitely helped by the Olympics falling into Q3 2008, and was given a kick by some solid and encouraging improvements within the Automotive, Media and Real Estate sectors, alongside strong increases spend wise from the mainstays – Finance, Technology/Telco and Travel.
This report also broke out segments within categories – allowing those who use it to get a better idea of how specific areas such as Music, Home Loans, Gaming, Beverages etc went.
On that note, the music industry definitely need a swift kick up the arse with their online investment – the ENTIRE industry only spent 365k on digital in Q3.
All in all, very encouraging results for the digital advertising world. Q4 will be interesting – publishers seem to be scrambling a little but this is a probably a result of overzealous revenue targeting rather than the bottom dropping out of the market.
2009 – who knows what it will hold … if I was a Sales Director I’d make sure I was extremely cautious on Q3 09 in terms of YOY growth … I’d also be somewhat concerned that the big 4 categories for online display spend – finance, automotive, tech and travel are copping a bit of a battering already as a result of a sluggish economic climate. Can they maintain the same spend levels in terms of dollar amount they invested in 08 in 09, let alone increase them?
Thankyou to Patty Keegan for supplying me with this report today.
Liam Walsh: It’s interesting to me that media businesses ask agencies and advertisers what their budgets and share of budgets are.
Publishers regaularly try to negotiate based on share of spend. They ask for the budget detail regularly.
Yet the first thought I had after reading this report was to wonder what specific revenue each publisher has and why can’t this be revealed?
How can the publishers ask for the same data from the advertiser and refuse to share anything back?
On another note, the top line growth is fantastic and much better than the experts predicted. Well obviously not for classifieds which is being weighed down heavily by employment advertising.
General display results showed relatively stable results by vertical which suggests that there hasn’t been any significant vertical strategy by publishers. Or if there has it hasnt yielded the results yet.
Either way, these are very good numbers for the display market and as usual the search juggernaut continues.