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Online ad spend to surge in Europe
13-07-2007
by Emmet Ryan

Spending on internet advertising in Europe is set to reach EUR16 billion by 2012, according to a study by research group Forrester.

The report said that spending on web ads will more than double over the next five years from its current level of EUR7.5 billion, and account for 18 percent of total media budget in Europe. Online display advertising is expected to grow from its current level of EUR2.5 billion to EUR5.6 billion by 2012.

The predictions back up research by iReach which estimated that the Irish online advertising market was growing. The Institute of Advertising Practitioners in Ireland reported that EUR13.5 million was spent on online advertising in Ireland last year, a figure iReach expects will grow to EUR35 million in 2007.

Forrester said the increased interest in internet advertising comes as people spend more time online. The report found that 36 percent of the 25,000 consumers surveyed were watching less TV as a result of spending more time surfing the web.

The analysts said the increasing availability of home broadband access, which it expects to increase from 47 million Europeans today to 83 million by 2012, will see existing online advertisers increase the amount they spend on internet advertising and expanding into new formats.

"An expanding interactive marketing universe doesn't just mean more budget," said Rebecca Jennings, senior analyst with Forrester. "Over the next few years, the shift of online marketing from experiment to mainstream will force marketing organisations and processes to change. As different types of social media like MySpace and peer reviews strengthen their grip on users, expect marketers to jump on the bandwagon by switching ad spend to social media forms like RSS, blogs, and networks."

The online advertising market has been a hotbed of activity in recent months with Google purchasing internet ad firm DoubleClick for USD3.1 billion in April, a move that was soon followed by Microsoft which bought out digital marketing firm aQuantive for USD6 billion.

"The recent rash of acquisitions within the online marketing space -- such as Microsoft's acquisition of aQuantive and Google's purchase of DoubleClick -- presents marketers with easier routes online through integrated media operations and will drive up spend and innovation," said Jennings.