European online ad spend up 40% last year

With some analysts predicting that advertising on traditional media may be impacted by an economic slowdown, the research shows that online advertising continues to grow apace, experiencing an average growth rate of 40% year-on-year across the 16 countries covered in the report. 

In 2007 the European online advertising market was worth €11.2 billion, up four billion euros from €7.2 billion in 2006. With a like-for-like growth rate of 40%, the European online advertising market shows signs of closing the gap on the US which grew 26% to a market value of €14.5 billion in the same period.  

Two thirds (65% or €7.3 billion) of European online ad budgets were spent in the big three markets of the UK, Germany and France. However some of the smaller markets in our report enjoyed very high growth rates – Greece at 91%, Spain at 55% and Slovenia at 49%. 

“10 before 10” 

The report also reveals the share that online advertising has of the total advertising spend in key markets (Chart 2). Alain Heureux, President of IAB Europe says “We are well on the way to achieving the “10 before 10”- that is 10 European countries where online advertising accounts for at least 10% of overall ad spend by the year 2010. At the end of 2007 Denmark, Germany, Netherlands, Norway, Poland Sweden and the UK had all reached this milestone.”  

What’s an Internet user worth to an advertiser? 

IAB Europe/PwC have created a measure ‘Spend per user’ to illustrate the value of one Internet user to an advertiser in the different markets. With the European average at €80.6, Norwegian advertisers spent the most at €133.2 per person, followed by the UK at €120.8 and Denmark at €109.5 in 2007 (Chart 3). In the US advertisers spent €91.9 per person in 2007. The more mature the market, the higher the value placed on the Internet user by the advertisers. 

The big category spenders 

Industry category data has been included in the report for the first time and reveals that the sectors investing the most in online advertising in 2007 were Entertainment & Leisure, Telecoms and Finance & Insurance. In particular, advertisers from the Entertainment & Leisure sector, which spends the most money at present, have taken advantage of the interactive and social media formats on the web to promote their products and services. 

Alain Heureux, President of IAB Europe concludes “Despite a slowdown in advertising spend on some traditional media, the rise of online advertising in Europe continues unabated. Not only is the growth coming from some of the smaller markets which are seeing significant increases in their market value, but also from the more mature countries as companies move their advertising budgets online for the first time.” 

The report was compiled by IAB Europe as part of the body’s annual advertising expenditure survey for the year ending December 2007. It was processed and analyzed by PricewaterhouseCoopers (PwC).  

Nicki Lynas, Senior Manager at PwC said "The development of the more mature markets in Europe is a sign that they are seeing increasing amounts of investment from a wider range of advertisers than ever before." 

To download a pdf of this release with charts go to:
www.greenfieldscommunications.co.uk/releases/08/080602_IAB_ADEX.pdf 

Source:  IAB Europe