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1/27/07

FTM: Europe Started Slower Than The US In Embracing Internet Advertising Opportunities, But It Has Caught Up Real Fast -- by Philip Stone

For the complete report from the FTM click on this link

Europe Started Slower Than The US In Embracing Internet Advertising Opportunities, But It Has Caught Up Real Fast -- by Philip Stone

European online advertising is forecast to grow some 25% this year whereas in the US online growth rates are projected at 19%, but while the Internet’s percentage of the total advertising spend is pretty much the same for both (7.2 – 7.3%) Europe is expecting to hit around 9.4% in 2010 compared to 8.9% in the US.Those numbers from various eMarketer and Jupiter Research reports indicate that the Internet spend rate in the US will slow appreciably this year from its usual 30%+ range, but in Europe it is still full steam ahead! In dollar terms, the US, of course, still wins hands down with around $16 billion spent last year on Internet advertising whereas for Europe it was just $6 billion.

But European advertisers are beginning to substantially increase their Internet spends, some countries more than others. In The UK, for instance, the spend proportion this year is forecast to hit near 18% according to GroupM, a media buying agency. Financial services spurred a robust 2006 UK Internet spend with the numbers up some 40%. The UK accounts for around half of Europe’s Internet spends. But as in the US, the Internet’s advertising growth in Europe comes at the expense of traditional media. eMarketer says that Europe’s 7.3% Internet total spend this year already puts it ahead of radio. It is shooting towards 9.4% of the total spend in 2010 and that is really going to affect newspapers that will see their market share drop to 28.1% from last year’s 31.1%. Magazines will drop from 16.9% to 15.8%, but television will see a slight increase in the proportion, from 33.4% to 34.4%.

“More than half (51%) of the growth in online ad spending in Europe has come at the expense of other media, according to the Marketer’s Internet Ad Barometer report, published by the European Interactive Advertising Association.

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