Internet advertising comes of age
18-05-2007
by Ciara O'Brien

Online advertising is big business these days. Globally, the market racked up USD16.8 billion in revenues last year, according to the Internet Advertising Bureau (IAB), and while it may have had a slow start, Irish interest in online advertising is steadily growing.

According to recent research, online advertising spend has overtaken cinema advertising spend in Ireland. Meanwhile, the Institute of Advertising Practitioners in Ireland (IAPI) recently admitted its first digital marketing agency to the fold -- somewhat of an endorsement of the medium. The new addition, online marketing firm Interactive Return, has been in operation since 1999.

This shift in perception of online advertising is down to a number of reasons. As broadband penetration improves, Irish firms are seeing the sense of going online to reach internet users as they surf. The medium is gradually being accepted as a legitimate way to reach customers, and it also allows businesses to be sure they are targeting a specific section of the population by advertising on certain websites.

The internet is a great leveller of the playing field, allowing smaller firms to get a piece of the action when it comes to advertising alongside the larger corporate. And with a decent website, it's often difficult to tell exactly how big a business is unless you physically visit their premises, as long as the site -- and the ad -- is professionally presented.

The type of advertising itself has moved on from simple banner ads and annoying -- and often blocked -- pop-up ads. Google, for example, has immense pulling power and has built itself up as a brand in its own right. From sponsored listings to contextual advertisements, the tech giant has a finger in every pie, and the general feeling is that if you can't be found on Google, you may as well not exist.

Rich media advertising, viral campaigns, contextual ads, sponsored search results -- the list of ways that advertisers try to get users' attention is endless.

The effectiveness of online advertising can also be gauged from the campaigns, giving it another advantage over traditional ads.

There are plenty of figures to back up the growing success of online ads. According to the latest research from iReach, Irish online advertising spend is poised to hit the EUR35 million mark by the end of the year. Mobile marketing, a relatively new addition to the fold, is expected to account for 5 percent of this figure.

Figures from IAPI say advertisers spent EUR13.5 million online across 90 Irish websites last year, excluding Google, MSN, YouTube and other international websites and networks. Search engine marketing, meanwhile, is estimated to be worth EUR30 million a year in Ireland, according to Amarach Consulting.

Contrast this with a year ago when iReach was predicting that online advertising would reach EU10 million by the end of 2006. It's a marked increase in little over 12 months.

The medium is also attracting new fans. Political parties too are turning to the internet to reach potential voters, who are in turn seeking out information on the general election online.

Website IrishElection.com said its traffic tripled in the days following the calling of the General Election. Broadcaster RTE has its own General Election site, as does the Irish Times site, Ireland.com, and the Labour party, for example, has seen some of its ads air on consumer media site YouTube.

Google-owned YouTube, which is particularly popular with younger internet users, as well as other consumer-generated media sites, are a useful weapon for politicians, who may be able to make the internet ads cheaper than the TV spots that air. There is also the added advantage of having a bit more freedom with online ads, with TV advertising governed by strict regulations.

A quick glance at YouTube shows video of Fine Gael conferences, the Labour Party "time for change TV" ads, the Green Party’s proposals for Dublin Bay, and videos for a number of Fianna Fail candidates and councillors.

Despite all this movement though Ireland's online advertising market is still fledgling compared to the US and even the UK. However, this may mean that traditional media have earned themselves a stay of execution.

One of the media sectors being hit by the interest in online advertising in the UK has been the radio sector, which has lost some of its advertisers to the new medium. Experts predict the internet as an advertising medium will continue to grow, leaving traditional media lacking somewhat in the face of more up-to-date ad formats.

However, companies should be warned that consumers still expect a high standard in their online ads. According to the Advertising Standards Association in the UK, the number of complaints about online ads on UK website rose by about a third in 2006, and took second place in the rankings of most complained about non-broadcast format.

With more people going online to watch TV, listen to the radio and read newspapers, the importance of the internet should not be underestimated by businesses -- big or small.