UK Online Prices Head South, While China Posts Price Rise

22 January 2009

LONDON: The UK is the only major global economy set to experience internet ad rate deflation in 2009, with a slide of 8.7% at current prices. China, on the other hand, will post the highest rate of online inflation, according to WARC's latest Media Inflation Benchmarks Survey.

Advertisers with shrinking budgets are set to benefit from a second year of deflation in the UK, after an 8.4% decline last year in terms of cost per thousand.

Online adspend is set to increase by 9% in the country this year, with marketers predicted to invest more on search than display or banner ads.

Aside from the economic downturn, the UK online market is suffering because it is the most developed in the world, enjoying a 19% share of national adspend, compared with a global average of 7.1%.

By contrast, China – where the medium is more in its infancy – is forecast to witness an inflationary increase of 22.5% year-on-year, with India (+17.5%) and Russia (+16.7%) also posting sizeable rises.

In the US, inflation will reach 7.2% in 2009, compared with 7.3% last year, and online adspend, which takes 13% of the country's marketing expenditure, will increase by 15%.

Among the major European markets, France will see internet price inflation of 5% and an increase in online adspend of 22.5%.

Germany will also post online rate inflation of 6%, and internet adspend will expand by a forecast 21.5%.

Data sourced from World Advertising Research Center