Online advertising continues its strong growth with expenditure for the third quarter of 2007 totalling $A347.75 million, the largest quarter ever recorded. The results, which were released in the IAB Online Advertising Expenditure Report prepared by PricewaterhouseCoopers, showed continued steady growth of 6.8 per cent over second quarter 2007 and an increase of 32.2 per cent from the third quarter of 2006.

The breakdown of advertising remained relatively unchanged, with general display advertising and classifieds advertising accounting for 28 per cent and 26 per cent of the total advertising expenditure for the third-quarter 2007, respectively, while search and directories advertising made up the remaining 46 per cent.

The finance, computers and communications, and motor vehicles sectors continued to be the dominant industries using general display advertising, comprising more than 52 per cent of the general display spending. Motor vehicles increased its share two points to reach 15.7 per cent while computers and communications decreased almost three points to 15.4 per cent.

Recruitment continued to be the leading category for classified advertising expenditure, followed by real estate, then automotive.

Patty Keegan, IAB Australia's general manager, commented: "The market is growing steadily and we anticipate that Q4 will again experience a seasonal growth surge, which should ensure the reported market reaches the predicted $A1.4 billion for the full calendar year.

"We are continuing to work on including additional contributors to the report so that we can capture the full extent of the online market and are delighted to announce that Adconion, Drive Performance Media and Network Ten have contributed for the first time to the report," said Ms Keegan.

Paul McNab, PwC's lead partner for technology, entertainment and media, said the report shows growth across all categories, with search and directories performing best. "The increased penetration of broadband Internet access enables content providers to offer a richer media experience, thereby enhancing the online offerings to consumers. This supports the growth of online advertising which is likely to continue to grow significantly more strongly than alternative forms of advertising."

Len Rust is publisher of The Rust Report.