The Australian online search advertising market grew 17% from June 2013 to June 2014. This was a reduction on the 23% growth rate achieved during the prior 12 months as expenditure from industries such as BFSI (Banking, Financial Services & Insurance), Travel and Consumer Electronics decreased significantly.
The revenue in the online directory market increased from June 2013 to June 2014 by only 2%, a reduction on the 4% annual growth achieved in the prior year. Australian Online Search and Directories Market Report 2014 states that the online search market is predicted to grow at a Compound Annual Growth Rate (CAGR) of 12% between 2014 and 2019; reaching $3.525 billion. Search will continue to outpace the online directories market which, impacted by substitutes in the search market and further consolidation amongst second tier online directory providers, is expected to decline in revenue with a CAGR of -2%, reaching $315 million by 2019. In real terms, the online directory market is flat.
Mobile search advertising continues to grow strongly, as consumers increasingly browse and research on smartphones and tablets. Smartphones with GPS technology can narrow a search to businesses within a reasonable distance of the user’s current location. Online directories like Yellow Pages are seeing strong growth on mobile platforms. Deep linking technology now enables in-app searching. Links can recognise what device an individual is using, and if it is a mobile device, what apps are installed. This is likely to stimulate much stronger adoption of mobile search advertising.
Search marketing agencies are providing more holistic digital marketing strategies for customers, rather than services that centre on search engine optimisation (SEO) services alone. Social media is an important component of their strategies, and there is increased focus on data analytics. As larger advertising agencies and organisations build up their own search advertising and SEO capabilities in-house, smaller independent specialist search marketing agencies will consolidate.
Google still dominates the Australian search advertising market. However, over the last year, Bing has increased its market share through putting significant effort into improving the user experience for both search marketing agencies and users. Social media functionality has become an important feature of online directories. A number of multi-industry online directories provide a user ratings/review component with their online directory, and utilise social media via Facebook and Twitter feeds, mostly for company announcements.
The market leader in the online directories market, Sensis, is re-positioning itself as a digital marketing and information services and directories business for small-to-medium enterprises (SMEs) providing a range of digital media services to complement its online directory core offerings. While some second tier online directories, such as dLook, continue to perform well, overall there was a reduction in revenue growth for second tier online directories, with some losing market share or being forced out of the market.