Frost and Sullivan: Despite a Q1 Slowdown, Australian Online Search Advertising Grows 30% in 2008-09
Announcement posted by Frost & Sullivan 16 Dec 2009
Google dominates with almost 90% revenue market share
SYDNEY, 16 December 2009 – Despite a significant first quarter slowdown as a result of the global financial crisis, Australia's online search advertising market achieved a 30% growth rate during 2008-09, with both revenues per ad and the amount of search ads served continuing to rise. The findings were released today in the digital media advertising analysis Australian Online Search and Directories Advertising Market 2009 - 2013, issued by consulting company, Frost & Sullivan.
Online search advertising's growth is being driven by a corresponding increase in Australia's online search market, which continues to be one of the most active areas of online business activity. Google dominates the online search market with its revenues accounting for almost 90% of total paid search market share in 2008-09. Microsoft’s Bing has shown slow but steady growth in global market share since its launch in May 2009, however in Australia, it has struggled to dent Google’s commanding position.
Overall online directories revenue growth dipped slightly in 2008-09 (21% in 2008-09 versus 22% in 2007-08). Sensis maintained its market leadership in this area, in part, due to the successful leveraging of its print brand, but Frost & Sullivan warns that the sector is coming under increased competition from a growing number of specialist online directory players.
These players are offering services both in direct competition to directories across multiple industries, as well as offering a growing number of niche portals that have directory services within a specific industry in addition to other content services.
At the same time, boundaries between the online search and online directories markets are blurring, with search engines such as Google and portals such Yahoo! starting to encroach upon the wider online directories environment.
Trends
Frost & Sullivan predicts that both the search and online directory markets will display strong growth over the 2010 to 2014 period, with search expected to achieve a compound annual growth rate (CAGR) of 20%, and directories a CAGR of 15%.
Online advertising is expected to be the fastest growing component of the online directories market, outpacing the growth of paid listings over the next five years as many players move towards a free listing model.
The report notes that Search Engine Marketing (SEM) and Search Engine Optimisation (SEO) continue to attract advertiser spend in Australia and in a change to previous patterns, the two strategies are becoming more widely adopted simultaneously rather than exclusively. With increasing availability of market skills and the rising importance of integrated search strategies to achieve competitive effectiveness, the study predicts that SEM will increasingly be deployed with SEO.
Phil Harpur, Senior Research Manager, Australia & New Zealand, Frost & Sullivan says, “Australia's online search advertising market may be maturing but consistently high advertiser satisfaction rates and continuing strong levels of search activity will ensure that the sector attracts healthy returns in the medium term. In fact, online search advertising remains the stand-out segment in growth terms for the digital media advertising industry.”
About the report
Research for the report included an extensive survey of 240 senior management level executives, with control or insight into the business’ marketing budget and strategy. All respondents’ businesses were required to have a total advertising budget for all media of more than $1000 per annum, and had to be existing users or purchasers of online search and directories advertising (defined according to media spend in 2009).
The Australian Online Search and Directories Advertising Market 2009-2013 forms part of the Frost & Sullivan Digital Media Advertising program. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com
Online search advertising's growth is being driven by a corresponding increase in Australia's online search market, which continues to be one of the most active areas of online business activity. Google dominates the online search market with its revenues accounting for almost 90% of total paid search market share in 2008-09. Microsoft’s Bing has shown slow but steady growth in global market share since its launch in May 2009, however in Australia, it has struggled to dent Google’s commanding position.
Overall online directories revenue growth dipped slightly in 2008-09 (21% in 2008-09 versus 22% in 2007-08). Sensis maintained its market leadership in this area, in part, due to the successful leveraging of its print brand, but Frost & Sullivan warns that the sector is coming under increased competition from a growing number of specialist online directory players.
These players are offering services both in direct competition to directories across multiple industries, as well as offering a growing number of niche portals that have directory services within a specific industry in addition to other content services.
At the same time, boundaries between the online search and online directories markets are blurring, with search engines such as Google and portals such Yahoo! starting to encroach upon the wider online directories environment.
Trends
Frost & Sullivan predicts that both the search and online directory markets will display strong growth over the 2010 to 2014 period, with search expected to achieve a compound annual growth rate (CAGR) of 20%, and directories a CAGR of 15%.
Online advertising is expected to be the fastest growing component of the online directories market, outpacing the growth of paid listings over the next five years as many players move towards a free listing model.
The report notes that Search Engine Marketing (SEM) and Search Engine Optimisation (SEO) continue to attract advertiser spend in Australia and in a change to previous patterns, the two strategies are becoming more widely adopted simultaneously rather than exclusively. With increasing availability of market skills and the rising importance of integrated search strategies to achieve competitive effectiveness, the study predicts that SEM will increasingly be deployed with SEO.
Phil Harpur, Senior Research Manager, Australia & New Zealand, Frost & Sullivan says, “Australia's online search advertising market may be maturing but consistently high advertiser satisfaction rates and continuing strong levels of search activity will ensure that the sector attracts healthy returns in the medium term. In fact, online search advertising remains the stand-out segment in growth terms for the digital media advertising industry.”
About the report
Research for the report included an extensive survey of 240 senior management level executives, with control or insight into the business’ marketing budget and strategy. All respondents’ businesses were required to have a total advertising budget for all media of more than $1000 per annum, and had to be existing users or purchasers of online search and directories advertising (defined according to media spend in 2009).
The Australian Online Search and Directories Advertising Market 2009-2013 forms part of the Frost & Sullivan Digital Media Advertising program. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com