We saw it in yesterday’s Fairfax Media result: a hint of the growth in revenue for online advertising.
It’s outstripping all other forms of media and it saved Fairfax from a terrible result, just scraping through thanks to 43.7% growth in revenue for Fairfax Digital – to $61.2 million – and 41.7 per cent growth in earnings before interest, tax, depreciation and amortization, to $17 million.
Internationally, the internet is on a commercial roll. Last week, Arthur Hayes Sulzberger, the publisher of America’s most prestigious newspaper, The New York Times, said it was possible the paper might even cease paper publishing.
“I really don’t know whether we’ll be printing the Times in five years, and you know what? I don’t care either,” he told Tel Aviv-based daily Haaretz in a rare interview. “The Internet is a wonderful place to be, and we’re leading there.”
Figures out yesterday for the Australian market show internet advertising reached $990 million in 2006 in a series of huge leaps: it totalled $195 million in the first quarter and by the third quarter had reached $263 million.
Now, according to Fusion Strategy, a Sydney consultancy, internet advertising will top the $1.5 billion mark in 2007, exceeding radio advertising and the magazine market.
If it reaches this level it will be valued at more than half the metropolitan TV market and around 45 per cent of the total Australian TV ad market (metro and regionals). In comparison pay TV is expected to reach $225 million this year from $205 million in 2006.
On Fusion’s figures, if internet advertising doesn’t slow down it could pass newspapers ($3.33 billion and all TV $3.34 billion) by around 2010.
Interestingly TV will surpass newspapers this year as the media with the largest TV spend. But the internet is closing rapidly with this year’s increase estimated by Fusion to more than 50 per cent.