Online advertising grows 64 per cent in 2004 – news commentary by Andy McCourt
Australia’s advertising market was worth $9.1 billion in 2004, a growth of 10 per cent over 2003. Directories, apparently not considered mainstream media by ABC and CAB, adds another $1.3 billion to this figure, taking it past $10 billion for the first time. Combining all of the print-related media – newspaper, magazines and outdoor, print’s share is $4.7 billion or 52 per cent. Free-to-air TV is at $3.2 billion, Pay TV $115 million and radio $850 million. In the UK and USA, online advertising revenues are already higher than radio.
Two of the major players in online advertising, John Fairfax and the Packer/Gates-controlled NineMSN, expect 2005 performance to equal 2004, forecasting this year’s spend to reach $636 million online. Search engine advertising showed the highest growth with Google, Yahoo! and NineMSN the top three. Telstra’s Sensis division is also cashing in on the internet boom with its Yellow Pages, White Pages, Trading Post, CitySearch and Whereis sites.
ADSL, wireless and cable internet – broadband – is enabling more people to access the internet faster, from more places and with more content. By the end of 2005, 60 per cent of Australians will be on broadband.
The head of the world’s largest advertising agency conglomerate, WPP (Ogilvy & Mather, Young & Rubicam, JWT, Wundermann etc), Sir Martin Sorrell, recently said that magazines and newspapers are going to come under increasing pressure from the growth in online advertising. In an interview in the UK’s Independent newspaper, Sorrell pointed to forecasts predicting that internet advertising in the US will overtake magazine ad spend by 2007.
"I think the challenge facing paper publishers—newspapers and magazines—is getting greater and greater,” Sorrell said. “I read less weeklies and less fortnightlies. I don't get my 'market close' from the FT any more; I get it from Bloomberg the night before. Can I wait for Fortune or Business Week or The Economist? The answer is probably 'no'."
MY CALL
Ride the Comet’s tail.
The comet is, of course, the world-wide-web. Australia’s largest magazine publisher, PBL does it; so does Fairfax and Telstra/Sensis. So does the publisher of this online bulletin. What is stopping every printer offering online advertising services to clients? Very little.
Online services are a natural extension for print information providers and, as Mike Hanlon’s Gizmo magazine proved www.gizmag.com.au< >, can be interlinked for mutual benefit.
More so than print, the time-limited media is likely to suffer. TV, radio and cinema all operate the ‘only 24 hours in a day’ principle. Print, outdoor and the internet are space limited; or virtually unlimited. If you sell more ads, you just increase the space. With TV you have to increase the price to prevent channels becoming 24-hour ad broadcasts!
Futurist Dr Patrick Dixon www.globalchange.com said he set up an online bookstore in 30 minutes and began selling thousands of dollars in books a month at good profit – both his own and others.
As an industry, we have to embrace online advertising, promotion and selling wholeheartedly. Every day we should ask ourselves ‘how can I make a better online strategy today?’
The time to do it is now, not when, as Sir Martin Sorrell suggests, online advertising exceeds that in magazines by 2007.
The head of the world’s largest advertising agency conglomerate, WPP (Ogilvy & Mather, Young & Rubicam, JWT, Wundermann etc), Sir Martin Sorrell, recently said that magazines and newspapers are going to come under increasing pressure from the growth in online advertising. In an interview in the UK’s Independent newspaper, Sorrell pointed to forecasts predicting that internet advertising in the US will overtake magazine ad spend by 2007.