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Online Search Advertising Outperforms All Other Major Online Advertising Segments Finds Frost & Sullivan - Search will outpace online directories, CAGR of 16% expected till 2018
Online Search Advertising Outperforms All Other Major Online Advertising Segments Finds Frost & Sullivan

 

NewswireToday - /newswire/ - Sydney, Australia, 2013/12/10 - Search will outpace online directories, CAGR of 16% expected till 2018.

   
 
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The Australian online search advertising market grew 23% from June 2012 to June 2013. Its strong growth rate is predicted to continue at a Compound Annual Growth Rate (CAGR) of 16% between 2013 and 2018. Continuing its historical trend, online search outperformed all other major online advertising segments, including online general advertising which includes sponsorships, integrated site content and e-newsletters; online classifieds and online directories.

According to Frost & Sullivan's new report, Australian Online Search and Directories Market 2013, search will continue to outpace the online directories market and its proportion of the total online search and directories market is forecasted to increase from 83% in 2013 to 91% in 2018.

Smartphones and tablets offer significant opportunities for the online search and directories market. Phil Harpur, Senior Research Manager, Australia & New Zealand ICT Practice, Frost & Sullivan says "The volume of local searches conducted via the mobile web is growing at a much faster rate than via fixed internet connections. Search results from mobile searches are becoming more distinct to fixed internet searches, with a high proportion of mobile searches optimised for location based material. Also click-to-call features are becoming more prominent in mobile search advertising."

As with previous years, the allocation of advertising budgets to search advertising and SEO services has increased continually over the last 12 months. Migration from offline to online channels is a significant factor in search advertising market growth as more than 50% of advertisers divert funds from traditional media advertising toward augmenting their search advertising expenditure. As consumers increasingly browse and do research on smartphones and tablets, the proportion of search advertising spending targeted at mobile devices is expanding. From a search engine marketing (SEM) / paid search perspective, advertisers are attracted to the relatively high click through rates (CTRs) and low cost-per-click (CPC) on mobile devices. There is increased focus on integrating and optimising all advertising and market inventory and services such as online display, search, social media, online video, mobile and affiliate advertising into a single SEO strategy.

"Although Google still dominates the Australian search advertising market, Sensis's search advertising offering, Sensis ClickManager, displayed strong revenue growth in FY2013. Adlux has also established itself as a viable alternative to Google with continued strong growth from a small base," adds Harpur.

The online directories business model is under increasing pressure from the expanding online search market. Search engines, particularly Google, have the ability to influence and control the search and online directory ecosystem through changing and refining search algorithms. Google's recent Panda and Penguin updates altered its search algorithms and impacted free online directories, whose business model is dependent on search engine advertising, making them vulnerable to changes in advertising strategies such as these. The proportion of companies prepared to pay for listings continues to decline as they opt for free listings.

Revenue growth in the online directory market stabilised during 2012-13 after a slowdown in growth during the prior few years. Overall revenue growth increased from 1% to 4%, mainly due to stronger revenues from Sensis's online directory listings. However, there was a significant slowdown in growth of online directory listings for a number of other players. Revenues of online directories are expected to decline very gradually, its impact mainly counterbalanced by continued migration from print to online directories keeping declines in revenues modest.

Frost & Sullivan's report, Australian Online Search and Directories Market 2013, forms a part of the Frost & Sullivan Digital Media Research program. All research services included in this subscription provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.

About Frost & Sullivan
Frost & Sullivan (frost.com), the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants. For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies? Contact us: Start the discussion

 
 
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Online Search Advertising Outperforms All Other Major Online Advertising Segments Finds Frost & Sullivan

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