Online ad spend continues to soar

03-06-2008

by Bryan Collins

The amount of money spent on online advertising across Europe increased by 40 percent to EUR11.2 billion during 2007.

According to a report released by the Internet Advertising Bureau (IAB) of Europe and conducted by PriceWaterhouseCoopers (PWC), the value of European online advertising in 2007 increased by EUR4 billion from EUR7.2 billion in 2006.

"Despite a slowdown in advertising spend on some traditional media, the rise of online advertising in Europe continues unabated," said Alain Heureux, president of IAB Europe.

The report said that two-thirds of European online advertising budgets (EUR7.3 billion) were spent in the big three markets -- UK, Germany and France. Some smaller markets too saw significant increases in spending: online ad spend in Greece, for example, was up 91 percent year-on-year; Spain jumped 55 percent; and Slovenia rose 49 percent.

Meanwhile, online advertising accounted for at least 10 percent of overall advertising spending in Denmark, Germany, the Netherlands, Norway, Poland, Sweden and the UK. Ireland's online advertising revenue was not detailed in the report as Ireland is not currently a member of the IAB.

"The development of the more mature markets in Europe is a sign that they are seeing increasing amounts of investment from a wider range of advertisers than ever before," added Nicki Lynas, Senior Manager at PWC.

The IAB's US report, which was also conducted by Pricewaterhouse Coopers, showed that the value of the European internet advertising market is drawing closer to the US. In that region online advertising revenues grew by 26 percent to USD21.2 billion between 2006 and 2007. The report also showed that the growth of internet advertising revenues continues to outpace that of cable and television broadcast advertising revenues.

"Despite the current state of economic uncertainty, 2007 was another record year and the 13th consecutive record quarter. Interactive advertising is not just the future, it is the here and now, as it represents a meaningful and growing component of US advertising and marketing spend," said David Silverman, a partner at Pricewaterhouse Coopers.

Back to the European report search advertising generated the bulk of the online advertising last year, accounting for 41 percent of 2007 full-year revenues. It was followed by display advertisements, classifieds and lead generation ads (that is the fee advertisers pay to internet advertising companies that refer qualified purchases).

The sectors investing most in online advertising in Europe in 2007 were entertainment and leisure, telecoms, finance and insurance.

"In particular, advertisers from the entertainment and leisure sector, which spends the most money at present, have taken advantage of the interactive and social media formats on the web to promote their products and services," said the European IAB report.