Internet Adspend Continues Upward Trend

03 October 2006

LONDON: Global internet advertising spend is expected to rise by 30% in 2006 to $24.1 billion (€18.9bn; £12.8bn) and an impressive 84% between 2005 and 2008, according to a new report from media agency network ZenithOptimedia.

The agency also forecasts that online advertising will take a double-digit share of total adspend in the UK and Sweden this year, 12.9% and 10.5% respectively, the first time anywhere in the world.

The meteoric rise of the internet as an ad medium is helped by its increasing use among smaller brands, which favour it ahead of outdoor advertising.

The latter is set to be overtaken by the internet this year, while radio will feel online's hot breath on its neck and should prepare for a very narrow 0.7% lead by 2008, says Zenith.

The report finds that marketing on web search engines such as Google and Yahoo is popular with small traders. It is relatively cheap and can be targeted effectively where mass-media campaigns would be expensive and have too much wastage.

Comments Jonathan Barnard, the agency's head of publications: "Internet advertisers are often people who wouldn't have been able to spend on television or press anyway, so we think the internet is creating some new demand."

The agency forecasts that total global adspend will slow from 6% this year to 5.4% in 2007 before a modest pick-up to 5.9% in 2008. Growth will therefore remain faster than the average growth rate over the last ten years which was 5%.

Data sourced from Financial Times online; additional content by WARC staff