The new IAB/PWC report on AU digital media expenditure has come out covering Q1 2009.
I asked the IAB for it this morning but as of 4pm they hadn’t returned my email (weird as they’re always so quick to respond to my blog. EDIT – my initial email had gone through to their spam filter) so I had to use the power of the Internet to scam a copy. Thanks to my insider for providing this.
The results aren’t as bloody as some (including me) predicted. I thought the market would be flat YOY for Q1 with many saying February was a particularly rough month. The market overall is up 16% year on year which is a solid result.
Display was up 16% year on year, Classifieds down 1.4% year on year and search up 23% year on year.
The classifieds results shouldn’t be too surprising considering the market around employment, automotive and real estate during the last 6 to 9 months.
Search is trucking along nicely – as to be expected – maintaining the same spend level as Q4 and showing good yearly growth. At this rate of growth and maintaining its current market share (lets say 94-95%), Google AU should become a $1b revenue business for purely search by this time next year.
If we look at the pie – search accounts for 51.2% of total spend, display 24.9% and classifieds 23.9%
Classifieds is a rough area right now in terms of growth and share of the overall pie – during the past 5 quarters its share of the overall pie has decreased each quarter. Combine this with clear leaders in each category and you have to wonder how long this market can sustain so many players in classifieds …
However it is clear the IABs priority is Display advertising. Their efforts within search and classifieds are pretty minimal and most of their resource is spent being advocates of display media online. So it’s the display figures that they and their immediate stakeholders (ie the large players that fund the body) are interested in.
So how is the market for display advertising?
It’s ok. It’s up 16% year on year and significantly (15%) down quarter on quarter. But that Q on Q decrease isn’t anything to worry too much about – the same thing happened every year since 2002.
However it’s the lowest year on year increase since records were kept (2002) – but again, that was to be expected as the market is maturing in terms of revenue and growth.
It would still worry publishers and the IAB that digital is so heavily reliant on 3 categories for spend.
Auto, Computers and Technology and Finance represent 46% of total display revenues for Q1 2009. In Q1 2008 they represented 51% It’s down year on year but still a massive chunk of the pie.
Of those 3 categories only Automotive saw a rise – up 12% year on year. Surprising considering the state of the market and the reports around significant auto marketing budget cuts.
Big gainers included Government (up 150% to $4.8m) Travel (up 40% to $8.8m) and Entertainment & Leisure (up 36% to $8m)
The IAB and its stakeholders would also be concerned about the lack of progress around FMCG and Retail.
Retail is flat year on year, and FMCG was only up 21% (to a measly $4.8m) – combined the two categories don’t even total $10m for the quarter.
Lets look at this in the scheme of the bigger picture. Retail as a category spent $948m in the first half of calendar 2008. Food, Toiletries, Non alc. beverages accounted for over $340m for the same period.
I don’t want to keep banging the same drum but there are clear reasons why these categories are not currently embracing online.
Impact + effectiveness, pricing and measurement.
So yeah, okay results but not great. Maybe lets focus less on spinning ‘double digital market growth’ and more on solving the deeper issues.