Australia | Nov 07 2006
By Greg Peel
The growth of the online advertising industry continues to run ahead of broker estimations, although some admit their figures are conservative. Official figures show online growth at 57.5% for the third quarter, 2006, continuing the trend from the second (55.9%) and first (65.3%) quarters. Total third quarter online ad spend was $263m.
A breakdown shows the biggest winner is the Search & Directories category, with 70% growth, while classifieds surged ahead by 50%, up from 34% in the second quarter.
Merrill Lynch analysts forecast online will become the third biggest advertising category by the end of 2007, behind TV and newspapers. At a forecast $1.3bn for the year, it should surpass magazines ($1.1bn) and radio ($1.0bn). Its market share was 6% in 2005, but the analysts estimate this will grow to 9% in 2006, 11% in 2007 and 14% in 2008.
UBS notes the revenues of online job-search service SEEK (SEK) track in line with general online growth. To that end the analysts see upside risk to SEEK earnings. The company currently enjoys a 3/5/0 B/H/S ratio in the FN Arena database.
This is good news for Publishing & Broadcasting (PBL), although the analysts suspect ninemsn has lost market share. PBL’s fortunes in online will be enhanced when propertyseek is launched. Elsewhere, Yahoo! is suspected of being a big winner while Fairfax Digital, a subsidiary of Fairfax (FXJ) will have remained steady.
The losers, once again, are newspapers and television, as advertisers continue to embrace the online age.