Two major surveys of marketing sentiment and spend show the rise of internet advertising defying the credit crunch, with European advertisers happy to raid offline budgets to expand their presence online.
Global media buying agency ZenithOptimedia Group predicts that online advertising spend in Western Europe will grow by 27.9 per cent in 2008, scarcely slowing to record additional growth of 23.8 per cent in 2009. This comes in stark contrast to the stalling of budgets amongst traditional media: total European advertising budgets will grow by a mere 1.6 per cent this year.
Denmark seems likely to become the first European country where online’s share of marketing budgets will overtake that of TV: the web took 17.2 per cent of budgets in 2007 against TV’s 17.9 per cent. In the UK, the web’s 18.8 per cent share compares to 26.6 per cent for TV; in Sweden the figures are 18.3 per cent and 21.2 per cent respectively.
The latest round of the Ad Barometer published by the European Interactive Advertising Association (EIAA) sheds light on the dynamics behind this continued growth. The survey of Europe’s top advertisers finds 81 per cent of European marketers reporting a growth in internet advertising spend this year. Of these, 82 per cent admitted that funds came directly from their budgets for print, TV or direct marketing.
Dominic Buch, an analyst at Numis Securities, pointed to the credit crunch as a potential trigger for budgets moving online. “When things are looking bad, marketers might be more interested in moving spend from TV to digital,” he said. “The attraction is in more measurable marketing spend with demonstrable return on investment. This is a digital age, so people are reluctant to cease communicating.”
The EIAA survey uncovered a fundamental shift in the relative importance attached to online, with 38 per cent of advertisers now regarding the channel as “essential”, compared to 17 per cent in 2006. The sentiment is reflected in ZenithOptimedia’s figures for online’s share of worldwide ad spend, predicted to reach 13.8 per cent by 2010.
“This research shows that while other forms of media are suffering from slowing spend, online continues to take a growing proportion of advertising budgets,” said Alison Fennah, executive director of the EIAA. “Brands increasingly recognise its impact, value and potential ROI.”
