E-advertising is booming, says report

22-11-2005

by Ciara O'Brien

Internet advertising is booming in the United States, with revenue for the third quarter of 2005 hitting a high of USD3.1 billion.

According to figures from the US Interactive Advertising Bureau and PricewaterhouseCoopers, annual revenue in the US could reach more than USD12 billion for 2005.

This is the first time that quarterly revenues exceeded USD3 billion, with third-quarter revenue growing 33.9 percent on 2004's USD2.3 billion total, and rising by 4.7 percent over the previous quarter's USD2.9 billion.

"More and more marketers have embraced Interactive as an essential medium to reach and engage their consumers in more immersive brand experiences," said Greg Stuart, president and chief executive, IAB. "Moreover, Interactive advertising continues to prove itself as the most cost effective medium in driving sales and changing consumer attitudes providing a powerful competitive edge for these marketers."

PricewaterhouseCoopers described the quarter as the most impressive it has seen to date. "Clearly advertisers are realising the benefits of shifting more of their total advertising budgets to online -- it is an exciting prospect that the annual run rate may exceed USD12 billion," said David Silverman, partner, assurance services, PricewaterhouseCoopers.

In Europe, Internet advertising is also a growing medium, with some reports predicting a boom for the sector in the coming years. According to JupiterResearch, online advertising revenue in the region will reach EUR6.5 billion by 2010 -- almost three times the current EUR2.3 billion.

The surge is predicted as a direct result of European consumers spending more time online. Within the sector, paid search is set to balloon in popularity and take the lead by 2008. According to Jupiter, the paid search sector could be worth up to EUR2.9 billion by 2010, compared with EUR0.6 billion in 2004. Display ads are expected to generate EUR2.7 billion by 2010.

Irish internet advertising revenue is currently being measured by the Breakdown of Advertising Share and Expenditure (Base). Base is the official advertising expenditure measurement service for Ireland, and includes data from TV, press, magazines radio, outdoor advertising and cinema advertising. The latest figures from Base show internet advertising in Ireland is now comparable with cinema advertising.

Mark Tarbatt, managing director of Irish online advertising firm Generator.ie, pointed out that according to Base, the EUR639,000 in revenue recorded for September 2005 is an underestimate of the real picture. "The September figures are the more impressive when one considers it probably represents less than half of the amount spent on internet advertising in the month because it is not compulsory to submit the figures at the moment."

Ten companies registered to submit their figures to Base, but only five did so.