Internet advertising costs across Europe have fallen by 30% during the past year and, predicts researcher Jupiter MMXI, will continue their downward spiral over the next six months.

The freefall is driven by unsold ad inventory, says Jupiter, which estimates the monthly surplus at E60 million-E70m (£36m-£42m). Most European cyber-publishers have an unsold inventory of 60%, it opines.

In June 2000, advertisers paid an average of E30 (£18) for one thousand page impressions. Now they pay E20 (£12).

Online advertising analyst Staffan Engdegard believes that spend has not necessarily fallen in real terms: “Lower prices don't necessarily mean less ad spending. Advertisers get more for their money.”

“More importantly,” he adds, “this buyer's market allows them to change the pricing dynamics … price deals based on performance where they pay for the business results - be it clicks, leads, members or purchases - when traditionally they paid for the number of impressions."

News source: CampaignLive (UK)