Advertising Spend Set to Slow in 2009

In the wake of the global financial crisis and a decrease in economic conditions the growth of Australia's $12 billion media advertising market is predicted to fall in 2009.

Earlier predictions for the growth of the Australian advertising market saw increases of 6.2% in 2008 and 5.8% in 2009. However in the wake of the global financial crisis and weakening economic conditions, media agency Group M have revisited their earlier predictions to 3.8% in 2008 and by 2.3% in 2009*.

The Australian Financial Review (15/12/08), reported that tougher times are ahead in the advertising space where we will see decreases in revenue across the board in traditional mediums such as television, radio, newspaper and magazines.

So if overall industry growth is still expected but traditional medium spend is decreasing where is the expenditure? The AFR reported, "most of next year's growth would be driven by 'new media'....online display and classified advertising would increase 15% in 2009, online search advertising would jump 36.1% and the nascent mobile-phone ad category would soar 200%. Online and mobile ad revenue would total $2.1 billion next year, or 17.2% of projected total media ad spend of $12.3 billion"*.

So why the shift? Now more than ever advertising budgets are being scrutinised in an effort to save money. Advertisers want to see effectiveness, flexibility and proof of return on investment. New media offers accurate metrics reporting of ad performance allowing simple calculation of return on investment. The nature of the medium provides the ability to change online ad copy at short notice and without high costs. Search engine advertising provides opportunities to uniquely target users who are specifically searching on keywords relevant to a product, business or offering. There is also the ability to target specific geographical regions based on the origin of the searcher. Keyword advertising also means that advertisers are only paying when a user clicks on their ad, reducing wastage.

Although traditional mediums still have an important role to play in the mix, online technology is now offering more control and variety to advertisers. There is the ability to be equally creative (if not more creative in some circumstances) with ad copy and all within a pricing structure that appeals to businesses and organisations of all sizes.

Read more about digital advertising and search engine marketing on our website or feel free to contact us for further information.

* Source: The Australian Financial Review, 15/12/08 Page 16