A new report by Digital media executives anticipate a significant escalation in online advertising supported predicting that Australia’s $500 million online display advertising market will more than double over the next five years.

Multinational researcher Frost&Sullivan, predicts average growth of 19 per cent a year for the next five years to $1.2 billion by 2014, as reported in The Australian.

The report says the advertising slowdown will affect the online display market later than other sectors, with growth falling to 17 per cent in the financial year from 19 per cent in the year to June. And the dip will be short-lived, and growth will be back to 19 per cent in the 2011 financial year.

The report, which does not include search and directories advertising or online classifieds, says the share of major publishers — Ninemsn, Fairfax Digital, Yahoo7, News Digital Media and Sensis — is continuing to decline, while that of independent publishers and advertising networks is increasing. The major publishers had, however, had “weathered the economic downturn relatively unscathed”.

“The established base of premium sites has been a large contributor to this segment’s ability to remain in the forefront of advertisers’ minds,” the report says. The top five publishers lost two share points in the past year, falling from 63 per cent of the market to 61 per cent.

Next year 26 per cent plan to boost online spending, while 15 per cent are planning cuts. One in five advertisers (21 per cent) said they had cut their online advertising budget, while 40 per cent said they had increased it and 37 per cent said it was unchanged. The report also stated that this indicates overall greater stability in spending per organisation, with a much higher proportion of companies now maintaining or decreasing budgets.

According to The Australian the report covered more than 200 advertisers and more than 30 publishers and media buyers were interviewed.

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