Big growth predicted for online ads

Goldman Sachs (GS) surveyed more than 40 Australian traditional advertisers for a report on the state of play for Australian internet companies. The report highlighted the broad themes and factors impacting the online advertising market.

Despite the slump in online advertising in the third quarter and the softness in dot-com advertising post-April, traditional advertisers will increase online proportion of advertising spend from 1 per cent in 2000 to 2-3 per cent in 2001 on average, claims GS.

The US online advertising market has grown at a triple digit pace over the past three years. GS estimates that the Australian online advertising market will grow at a five year compound average growth rate (CAGR) of 73 per cent from $44 million in 1999 to $680 million in 2003. By which time online advertising will represent 6.8 per cent of total advertising spending in Australia.

GS believes the internet, as an advertising medium, provides most of the benefits of advertising on TV. As bandwidth continues to improve, the quality of online advertising advertisements will approach TV standards.

In addition to offering the branding capabilities of TV advertising, online advertising provides much greater accountability and targetability. It is often near impossible to measure the branding effect and return on investment (ROI) of TV campaigns, GS claims. Online advertising can produce detailed ROI information offline media cannot provide.

The key focus for internet advertising has been click through rates based on the concept that the internet has finally allowed accountable advertising. Audience measurement companies that measure click through rates, enable many agencies and properties to accurately measure users' activities on a site and interaction with banner ads. This arms the advertisers with the knowledge of the appeal of their product or service to a subset of the broader market.

GS believes that click through rates, in isolation, are not an accurate measure of a campaign's ROI. GS believes that the tools used to measure accountability will become more sophisticated.

The report outlines some of the key themes emerging in the internet advertising industry: the strength of a network or property's sale force; advertisers focus on broad reach or target niche markets; online advertising is part of an integrated campaign; new online market techniques, such as pop-up displays or e-mail marketing; cost per thousand page impression (CPM) rates and click through trends measurement.

GS delineated a major challenge that the online advertising industry faces both here in Australia and around the world. A majority of Australian traditional advertising agencies and media buyers do not actively promote the use of the internet as an advertising medium for their clients. Despite this trend, there are now a few specialist firms focused on internet advertising. GS sees this as a major challenge, because they believe that online advertising will be better than TV advertising with the improvements to bandwidth to come.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Resources

Best Deals on GoodGearGuide

Compare & Save

Deals powered by WhistleOut
WhistleOut

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?