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IAB Q3 figures: online advertising on track to reach almost $800 million for 2015

Interactive advertising revenue continues to grow, with the segment surpassing $200 million in a quarter for the first time in the third quarter of 2015. 

This sees the quarterly record bar raised from the $184.7 million recorded during quarter two, and puts the year-to-date revenue figures at $580 million. 

Based on these numbers, the IAB estimates that the fully-year interactive revenue number to be just short of $800 million, which, if it comes to fruition, will position online advertising as the biggest contributor to overall ad spend in the local market for the first time.

The fastest growing category in the latest report was again ‘mobile’, which grew 98 percent from the previous year. 

According to the report, this upward trajectory has been driven by smartphones, with phone-based advertising revenue increasing 123 percent year on year, while tablet revenue grew 22 percent in the same period.

However, with a contribution of $7 million this quarter and $16.9 million overall, this category still only contributes around 3.5 percent, indicating there’s still room for significant growth. 

In terms of year-on-year growth, ‘Mobile’ was followed ‘social media’ (up 53 percent) and ‘search and directories’ (up 28 percent).

Social Media revenue showed a 53 percent year-on-year improvement, reaching $10 million for the reported period.  Full-year revenue from this sector is expected to reach $38m.

As is usually the case in IAB reports, search and directories (largely made up of Google) again contributed the most of all categories, amassing a mammoth $110 million for the quarter.

But this isn’t necessarily good news for the local industry. Because much of this money is fed into the Google advertising network, the money ends up going offshore. And at the recent IAB Christmas event, guest speaker Ryf Quail (who organises the annual ad:tech events) expressed concern about the extent of interactive ad spend leaving our shores.

“As much as $500 million of overall spend for 2015 will end up abroad,” said Quail.

He said that the industry had to find ways in which to keep interactive ad spend within the local industry.

Quail pointed to KPEX as an example of the industry working together to keep a larger proportion of interactive ad spend in the local market, and said that measures like these would only become more important as the industry continues to evolve.

What this does however suggest is that the various media channels will increasingly have to collaborate and shift their attention from competing with each other to competing with the international tech behemoths that continue to grow every year. And whether the local players are willing to set aside their differences to work together is yet to be seen.          

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