By Jo Best, 23 October 2003 14:05
NEWS The online advertising market looks to have once again found its feet in 2003 and could sustain such growth over the next two years. The sunny spell for in the advertising forecast is due to an increased number of subscribers switching to broadband and more users signing up to e-commerce promotions.
After three years in the doldrums, internet advertising in Europe should hit double-digit growth in 2003, according to a study from consultants PriceWaterhouseCoopers (PWC) in collaboration with central buying service for ad space, Zenith Optimedia.
This year, web ad revenues should grow by 10.2 per cent compared to 2002 in six key European countries – France, Germany, the UK, the Netherlands, Italy and Spain – reaching €886m, according to analysts' predictions. And that's not all – the double-digit growth will carry on until the end of 2005, falling back to 8.2 per cent in 2006. Looking to 2007, advertising revenues could top €1.2bn.
The UK comes top of online ad revenue-generating countries with €302m, followed by France with €241m. The rest of the list sees Germany making €174m, Italy with €96m, Spain at €52m and the Netherlands with just €21m – and it's a sequence that won't change in the next four years according to PWC.
The study puts the healthy outlook mostly down to more people getting online, particularly signing up to broadband – which favours the development of new, value-added advertising formats, like video.
According to the consultants, the number of broadband users in 2003 will reach 15.9 million in total in the six countries in question, compared to 9.6 million last year. In 2007, the figure is predicted to hit as high as 43.3 million.
The study concludes that the rapid expansion of e-commerce transactions, particularly in France, Italy and the UK, will increasingly make the internet the appropriate medium for advertisers to have online operations.
Christophe Guillemin writes for ZDNet France
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1. Andrew Pike
The recent PWC report has shown that online marketing has stabilised and predicts that it is set to grow massively. This growth was almost unthinkable just a few years ago when dot.com companies were folding daily. The PWC report is a clear indicator that online advertising has finally come of age.
This Internet recovery and increased advertising spend is driven by many factors, including increased consumer time online and growing consumer trust of shopping online. A key contributor is also the growing understanding that online is an effective marketing tool for both building brand presence and securing sales. However, the most fundamental boost to online advertising has to be the fact that no other marketing medium can hope to deliver the same degree of tracking and accuracy as to the success of the campaign, as an online campaign. Online advertising is the most accountable medium available to marketers.
As an affiliate marketing network that serves, tracks and provides detailed reports on the performance of each advert, we are seeing an increasing number of advertisers deploying precise tracking methods to give them a valuable insight into the online behaviour of their audience. This intelligence enables them to refine their campaigns, ensure that they are working with a carefully developed network of publishers to produce targeted online campaigns and see their adverts succeed.
The increasingly sophisticated range of options available to marketers using online methods allows them to serve carefully targeted adverts whilst advanced tracking gives superior ability to measure ROI. With budgets still tight, any sensible marketer would look to the vehicles that offer transparent measurement and clear ROI.
With consumers spending over nine hours a month online at home (Nielsen Net Ratings – September 2003) any advertiser not addressing their online spend is missing out on a serious opportunity to target consumers. With this in mind, I fully expect the growth predicted by the PWC report to continue.