Online search advertising is proving hugely popular in Australia, with new figures pointing to a 17% lift in spend year on year between June 2013 and June 2014.  

Research from Frost & Sullivan shows that although growth in search ad spend has dropped slightly from the 23% seen in the 12 months leading up to H1 2013, businesses are still seeing significant value in promoting their services via search engines such as Google and Bing. 

Growth in search ad budgets is set to surpass spend on web directories yet again, as the former welcomes a compound annual growth rate (CAGR) of 12% between 2014 and 2019. Spend on web directories such as the Yellow Pages is set to go the opposite direction – declining at a CAGR of -2% up to 2019, equating to a worth of $315 million. 

If realised, the forecasts would lead the Australian search market to a value of US $3.5 billion in four years’ time.

Agencies take note

The state of search advertising in Australia bears plenty of similarities to the situation in many markets across the globe. Google remains the go-to engine for advertisers, although analysis from Frost & Sullivan shows that Bing has managed to make some ground on the tech giant through recent improvements to customer service.

Search agencies are looking to capitalise on the rise in spend by offering more holistic marketing strategies out to clients, according to the report. 

It’s thought that fewer agency groups are looking to focus on driving results through search engine optimisation (SEO) alone, which could result in more spend being ploughed into services like pay per click.

Frost & Sullivan also backed mobile search advertising to grow strongly in Australia, supported by increased browsing on mobile and tablet devices.

Earlier research from the group, released last year, showed that publishers were looking to cater for the growth in mobile traffic by producing more content optimised for their devices. The report also predicted spend on tablet advertising to account for 70% of mobile marketing budgets by 2019.