The latest Internet Advertising Revenue Report from IAB Australia has revealed a 12.1% year-on-year increase in online advertising expenditure in the September quarter, amounting to $4.2bn, with significant growth noted in video, classifieds, search & directories, and audio sectors.

The report, prepared by PwC Australia, outlines a 19.5% increase year-on-year uplift in the video market, reaching $1.15bn, a growth attributed to the Olympics-related activity. Classified expenditure increased by 13.8% to reach $0.7bn. Search advertising increased by 9.8% to reach $1.8bn, representing 43c of each dollar of internet expenditure. Audio advertising increased by 16.2% to reach $79m, while display advertising saw a modest increase of just 2.5% year-on-year to reach $0.5bn.

Video advertising overtook audio as the fastest-growing general display sub-sector this quarter, thanks to the Summer Olympics spend. Desktop devices increased their share of the video advertising expenditure to 45%, while connected TV spend slipped back to 44% and mobile video share of spend also decreased to 11%. Video displayed on social platforms now represents one third of total video expenditure.

Within audio internet advertising, podcast advertising had a strong quarter, increasing its share of total internet audio advertising to 40%, representing a 26.5% increase year-on-year.

Commenting on the result for podcasting, Chief Executive Officer, of Commercial Radio and Audio, Lizzie Young, said: "Online audio has cemented itself as a dominant force in digital advertising, and these results reflect its value for brands seeking to connect with local audiences."

"We know that where audience attention goes, advertising investment follows. As shown in the latest GfK survey, more than a quarter (27%) of commercial radio listeners now listen via streaming.

"The continued rise in online audio advertising shows how advertisers are responding to the rising demand for accessible, personalised content seeing audio as the answer to standing out and being heard."

Elsewhere, retail maintained its hold on general display advertising expenditure, with travel, finance and entertainment also seeing increased spend. Automotive stayed in the top five general display industry categories despite a decrease in its share against the September 2023 quarter.

"While the advertising investment market is still mixed, the strength of an audience engagement driver like the Olympics can have a major impact on ad spend and for the September quarter this was a key contributor to the year-on-year growth for video inventory. Search and social continues to experience solid growth, putting the calendar year for the digital ad market on track for low double-digit growth," said CEO of IAB Australia, Gai Le Roy.