The report shows strong growth across all categories of online spend during the 2007 to 2008 financial year.

In the 12 months to June 2008, search and directories advertising remained the fastest growing category of online spend – up 34% to $706 million.

General display advertising was up 23% over the 12 month period to $411 million, while online classifieds grew 21% to $407 million.

However, the report shows search and directories recorded its slowest second quarter growth in years, up just 1.9% in the three months to June 2008 to $187 million.

General display, meanwhile, grew a healthy 21.2% to $114 million in Q2 2008, while classifieds was up 4.2% to $111 million.

Search and directories is typically the fastest growing online advertising segment and in the 12 months to June 2008 accounted for 46% of all online expenditure, leaving the classifieds and general display segments each with a 27% share.

Paul Fisher, CEO of the IAB, said there was still plenty of work needed to educate key industries yet to fully embrace online advertising - including FMCG, retail and government - on the effectiveness online advertising plays not only in direct response, but also in branding.

“Looking ahead to a period of forecast economic uncertainty, advertisers can continue to invest confidently in online advertising knowing that their target audience is spending more of their time online, and that online advertising offers a cost-effective platform to reach and engage that audience,” he said.

In Q2 this year, FMCG, retail and government advertisers combined accounted for less than 10% of all online ad spend.

A significant increase in 3G mobile customer numbers helped drive that growth, which was in contrast to a small but continued decline in fixed-phone services over the last financial year.

‘There are now more than 4.5 million 3G mobile services in Australia, a 192 per cent increase between 30 June 2006 and 30 June 2007,’ said Chris Chapman, ACMA Chairman.

Tabled in parliament today by the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, the report provides a comprehensive overview of changes in the communications industry.

The number of fixed services dropped from 11.26 million to 10.92 million between 30 June 2006 and 30 June 2007. The number of payphones in operation in Australia (both Telstra operated and privately operated) dropped by 8,368, to 49,862.

In 2005-06 almost a million new geographic numbers were allocated by ACMA. In 2006-07, geographic numbers were predominantly allocated for VoIP services – 2.89 million out of a total 3.23 million. This increase is a sign of competition and the entry of new VoIP providers into the Australian market requiring a supply of numbers for services across the country.

Internet subscribers were another area of communications services growth. There were 6.43 million internet subscribers in Australia, made up of 2.09 million narrowband and 4.33 million broadband subscribers (to the end of March 2007). Domain name registrations also grew: 795,368 .com.au registrations in the year compared with 612,918 the previous year.

In the broadcasting sector, Australian television networks met the minimum requirements of at least 55 per cent of all Australian programming between 6am and midnight, met annual quotas for children’s programming (as outlined in the Children’s Television Standards (CTS)), and requirements for first release Australian drama programs (as outlined in the Australian Content Standard).

The report also includes the results of an analysis of the consumer benefits and economic impact resulting from reforms in the telecommunications sector in 1997. The analysis concluded that total production in the Australian economy in
2006-07 grew by an additional $1.2 billion due to price and service competition in the telecommunications sector.

Table 1: Key communications indicators
Measure	30-Jun-06	30-Jun-07
Internet subscribers (end March 2007)	5.95m	6.43m
Narrowband (dial-up) subscribers (end March 2007	2.78m	2.09m
Broadband subscribers (end March 2007)	3.16m	4.33m
Pre-paid mobile services (does not include Telstra, Vodafone, or ‘3’ wholesale services)	9.7m	10.15m
Post-paid mobile services (does not include Telstra, Vodafone or ‘3’ wholesale services)	9.6m	10.65m
Total mobile services	19.76m	21.26m
GSM coverage as a proportion of the Australian population	96 per cent	96 per cent
CDMA coverage as a proportion of the Australian population	98 per cent	98 per cent
3G (W-CDMA) coverage as a proportion of the Australian population	53 per cent	98.8 per cent
Total fixed lines	11.26m	10.92m
Fixed lines covered by the Customer Service Guarantee (CSG)	8.71m	7.91m
New geographic numbers allocated by ACMA	0.99m	3.24m
Payphones – services in operation	58,230	49,862
Licensed telecommunications carriers	158	169
Licensed or registered cablers	56,958	58,398
Calls to emergency services using 000 and 112	11,588,777	12,139,526
Complaints to the Telecommunications Industry Ombudsman	127,479	156,802
Number of carriage service providers registered with the TIO	1,170	1,231
Cost to industry of providing interception	$5.7m	$8.2m
Commercial television networks revenue	$4119m (2004-05)	$3990m (2005-06)
Commercial radio networks revenue	$945m (2004-05)	$998m (2005-06)
Australia’s position as a ‘spam relaying’ country	10th (February 2004)	28th (30 June 2007)
Prohibited internet content items actioned within Australia	18	5
Prohibited internet content items actioned outside Australia	706	494
Number of registered .com.au domain names	612,918	795,368

• Linear video ads
• Non-linear video ads
• Companion ads

These recommendations have been constructed for these ad products in order to meet the following marketplace needs:

•  More efficient operations through a common set of creative submission guidelines
• More efficient development of ads and players through minimum common creative guidelines, including click functionality and duration definitions
• Easier digital video ad buying across multiple sites through minimum common ad sizes for overlay and companion ads
• Better consumer understanding of ad interactions and environments through best practice recommendations for creative development and player environments

There are three types of recommendations contained in this document:

• Ad Product Guidelines
• Recommendations for common creative submission guidelines
• Additional best practices

Download the Digital Video Ad Format Guidelines and Best Practices.

Online Videos

• 10 Billion Online Videos Viewed in February – Up 66% in One Year , up 3 percent from January

• Google Sites once again ranked as the top US video property, with nearly 3.6 billion videos viewed (35.4 percent of all viewed videos), up 1.1 percentage points from the previous month:  

1. Google’s YouTube.com accounted for 96 percent of all videos viewed at Google Sites.

• Fox Interactive Media ranked second with 586 million videos (5.8 percent), followed by Yahoo Sites with 293 million (2.9 percent) and Microsoft Sites with 293 million (2.9 percent).

Audience Data (Unique Viewers)

• Nearly 135 million US internet users spent an average of 204 minutes per person viewing online video in February:
• Google Sites attracted the most viewers (81.8 million), who spent an average of 109 minutes per person watching video in February.
• Fox Interactive attracted the second most viewers (55.7 million), followed by Yahoo Sites (37.1 million) and Microsoft Sites (27.1 million).
• ABC.com attracted the tenth-largest viewing audience, and its viewers exhibited heavy engagement, averaging 51 minutes of online viewing per person.

Other notable findings from February 2008:

• 72.8 percent of the total US internet audience viewed online video.
• 80.4 million Viewers watched 3.42 billion videos on YouTube.com (42.6 videos per viewer).
• 50.2 million Viewers watched 539 million videos on MySpace.com (10.7 videos per viewer).
• The average online video duration was 2.7 minutes.
• The average online video viewer consumed 75 videos.

(data from the comScore Video Metrix service)

The Internet accounts for about 20 percent of overall media consumption in the U.S., says the Yankee Group, but advertisers are spending only about 7.5 percent of their budgets online, leaving “tremendous potential for marketplace growth.” By 2011, the researcher predicts, 25 percent of all media consumption will be online, drawing 15 percent of advertiser dollars.

According to Yankee Group, the factors driving the revenue growth are increased online audiences, the development of new types of advertising, and new publisher business models that help sell interactive ads.

“With Internet connectivity nearly ubiquitous, online advertising growth is inevitable,” said Yankee Group Sr. Analyst Daniel Taylor, author of the report. “And yet the Internet is still a relatively new digital medium. Steady growth in online advertising will require publishers to invest extensively in new media and advertising product development.”

Group M, the media planning and buying agency owned by WPP Group, has forecast that spending on Internet advertising in the UK will surpass spending on TV ads in 2009 – making the UK the first of the world’s major economies to see TV spending overtaken by the Internet.The conclusion is based on a predicted rise of almost 31% in online ad spending in 2008, compared to 1% annual growth in TV ad spend. This Group M forecast puts 2008 UK online ad spending at £3.4 billion (with 65% coming from search). This total is slightly higher than eMarketer’s most recent estimate (£3.24 billion). If eMarketer’s projection is nearer the mark, it may be 2010, rather than 2009, before TV loses its top spot in the UK pecking order. But the changing of the guard is not far off!

The Interactive Advertising Bureau “Online Advertising Study” published in October 2006 came to very similar conclusions, estimating that Internet ad spending amounted to 10.5% of total media spend in the UK for the first half of 2006, against television’s 22.7% and 11.4% for national press.

This tends to confirm that Britain now has a higher proportion of total spend online than any other country. (Globally, online spending averages just 5.8% of total ad spend, according to ZenithOptimedia.)

Of course the UK media landscape is unusual. For one thing, the print sector remains pretty healthy. Also, the phenomenal rise of the Internet has encouraged significant spending on the Web by UK advertisers, and hard evidence of online successes breeds further investment.

Moreover, the dominance of television as an advertising vehicle is less pronounced in the UK, because TV programming is not funded by advertising to the same extent that it is in the US and elsewhere. The country’s leading TV broadcaster, the BBC, was established with a “public service” remit, and has always been supported chiefly by an annual license fee (in 2007, £135.50 for households with a color TV set, and £45.50 for black and white).

Nonetheless, the channels that do rely on advertising – including (among others) terrestrial channels ITV1, ITV2, Channel 4 and Channel Five, as well as cable and satellite broadcasters – have helped to ensure that TV ads have a long and proud tradition in Britain. The fragmentation of TV audiences in the UK is a real worry, because TV has been the leading medium for advertising in the country for decades – since the explosion of commercial advertising after World War Two.

The ratio of advertising to content on British TV is much lower than in the US. A typical hour-long program will have at most four commercial breaks, and one of these will rarely contain more than 5 or 6 ads. Yet TV is acknowledged to be the channel that’s most memorable for consumers, and often best for brand messages – at least historically.

Against this background, it’s taken time for many of the UK’s iconic household brands to even contemplate turning their back on TV. In fact, they are not so much leaving this traditional channel, as scaling back (especially when broadcasters can no longer promise consistently large audiences). Brands of all kinds have had real success with online campaigns, or integrated campaigns that cost far less than TV, now that their audiences are transferring so much of their attention to the Web. That’s the trend that’s set to continue.

The forecast was made by Group M, a subsidiary of Sir Martin Sorrell’s WPP group, which expects UK internet advertising revenues to swell by more than 30 per cent to £3.4bn this year. TV advertising, on the other hand, is expected to grow by less than 1 per cent to £3.56bn in 2008. And by 2009, after Sweden, the UK is likely to become the world’s first major economy to witness the ascent of the internet past one of its biggest rival mediums in the advertising arena.

“It will be a milestone achievement,” said Adam Smith, futures director at Group M and the author of the forecast. “Sweden will get there this year, and the UK is probably going to be next, in the following year.”

Mr Smith also said that the internet will develop as a key complement to TV advertising, adding: “When we talk about internet advertising, we are talking about a mix which includes search, display and classified advertising. Out of that, search accounts for around 60 per cent, and that money is not coming from TV ad budgets. The internet will sit beside TV as an increasingly important avenue for advertisers.

According to Group M, online advertising revenues were at the £43m mark in 1999. By 2004, the numbers had edged past £700m and climbed to almost £2bn in 2006. Television advertising growth hit the brakes and went into reverse during the same period, declining from +7.9 per cent year-on-year in 2000 to -4.1 per cent in 2006. Group M ex-pects 2007 to reveal a recovery of growth to 3.3 per cent, followed by a dip to 0.9 per cent in 2008.

“It’s become very important, very fast,” said Wayne Arnold, European chief executive of Profero, a leading digital marketing agency, “Eighteen months ago, you could have managed to get away without building online into your advertising and marketing strategy, but, if you’re the manager, you’d probably get fired now. It cannot be ignored.

“The internet appeals to consumers in a way that TV does not. Over the past 50 years, advertisers have learnt how to shout down to people, but the internet offers interactivity, unlike TV. The little red button on television remote controls, for example, was more of a red herring than anything else: you press it, you get a longer advert and your TV experience is interrupted. That does not happen online where interactivity adds value to the user experience – that’s quite important in winning the attention of your customers.”

A recent survey by Forrester Research underlined the importance of the internet as an advertising medium. Forrester asked a sample of European adults how much time they spent watching television and on the internet. The results revealed internet usage rose significantly as members of the sample spent more and more time online and ultimately surpassed the time they spent watching TV.

Rebecca Jennings, a senior analyst at Forrester, noted that a number of advertisers remained wary of the internet despite the evidence, but added: “This kind of milestone, when internet overtakes TV, will really bring it home to the industry that this is a medium to be reckoned with.”

She added: “Looking ahead, I think advertisers will start using high rates of broadband usage to grow other parts of the mix. Search will remain important, but it will probably grow at a slower rate than the other components of the online media mix as advertisers exploit other areas. For example, they may use more video ads on websites as more people switch to a higher bandwidth.”

The Group M forecast also noted the growth prospects of online video. Group M’s Mr Smith said: “FMCG [fast-moving con-sumer goods] is a small minority of online display investment. This is, however, set for rapid growth… Faster, cheaper memory makes the production, distribution and storage of video easier. Video is the mother tongue of FMCG marketing. It is also 30 per cent of all web traffic already. Advertisers are aware of the need to find the under-35s TV is giving up, and that a website [alone] may not be enough [to attract them].”

LONDON (Reuters) – Shoppers will be able to buy Tube tickets and newspapers with a wave of their mobile phone rather than cash during a trial starting in London Wednesday.Hundreds of people have been given special handsets fitted with a built-in credit card and Oyster card, the device used to pay for train and bus tickets in the capital.When the phone is passed over a scanner in stations or shops, money is deducted from the mobile phone as payment, the trial’s organizers said.People can spend up to 10 pounds at a time at selected shops and cafes, including Coffee Republic, Threshers and Books Etc.Wireless transactions are common in some countries, such as Japan, where consumers already use mobiles to pay for everything from burgers to train tickets.Organizers say that if the six-month London trial is a success the scheme could be extended to include bigger payments, more shops and concerts and plays.Those taking part will receive 50 pounds worth of Oyster journeys, 60 pounds off their O2 phone bill and 200 pounds to spend with the in-built Barclaycard.The companies behind the trial include Transport for London, mobile phone firm O2, Barclaycard, Visa Europe, and Nokia.(Reporting by Peter Griffiths; Editing by Steve Addison)

The numbers are soaring.

Choose an adjective: Epochal. Momentous. Historic. Whatever the label, US online advertising spending is entering a new era.

eMarketer projects that US online advertising will more than double as a percentage of total media, rising from only a 6% share of total media in 2006, to slightly more than a 12% share in 2010.

 In roughly the same period, online spending will nearly triple, rising from $16.9 billion in 2006 to $42 billion in 2011.

According to David Hallerman, eMarketer Senior Analyst and author of the new report US Advertising Spending, these four milestones mark the change:

“First, US Internet ad spending surpassed $5 billion in Q2 2007, the largest sum recorded in any quarter according to research from the Interactive Advertising Bureau and PricewaterhouseCoopers.”

eMarketer projections suggest that, in Q4 this year, spending will leap past the $6 billion mark.

“Second, while 69 of the 100 largest US advertisers put smaller budget shares into four traditional media—television, radio, newspapers and magazines—in 2006 than the previous year, 70 of the same group put larger shares into Internet advertising.”

Furthermore, 58 did both—decreased their traditional spending share and increased the Internet share.

“Third, even as the credit crunch pulls ad money off the total media table, the Internet looks to be more resistant to economic turmoil,” says Mr. Hallerman. “To put the obvious into figures, online advertising contributes more and more to the total ad spending universe every year.”

That share will be 7.4% this year, approach one in ten dollars next year, and will likely reach at least 13% by the end of 2011.

Finally, Mr. Hallerman notes, “Data from both eMarketer and TNS Media Intelligence indicate that 2007 Internet ad spending will be higher than for radio, as reported in August. That is the first time online ad spending will be greater than for any of the four traditional measured media.”

The average ad spend per Internet user is also growing. In fact, 2007 marks the first year that marketers will spend more than $100 to reach each person online. And, by 2011, advertisers will be spending nearly $200 per user.