The European online advertising industry is at most two years behind receiving its “fair share” of ad spending based upon consumers’ time spent online. The Internet’s highest possible expected share of the European ad market in 2006 was nine percent, a level it will surpass in 2008 - Jupiter Research (June 2008)
In the global advertising market, traditional television advertising is still the core purchase in advertising campaigns, with higher rates and longer purchase deals than those found in all other media.
According to JupiterResearch consumer surveys, European online users increased their median weekly online time by 25 percent between 2006 and 2007. This growth has created a new advertising opportunities, deeply attuned to digital user behaviour actions and taste expressions.
Subsequently it's of no surprise that internet advertising is the fastest growing segment of all ad spending. In certain markets, industry associations report that online ad spending has overtaken spending on some traditional advertising channels.
Of it's annual $4.8 billion in gross ad-revenue, Google paid $1.4 billion to it's various advertising partners. Ad networks are springing up everywhere to aggregate sales for smaller and more specialised markets. Creating and distributing targeted advertising is happening outside of traditional advertising agencies.
Some numbers:
US online ad spending is expected to reach $48 billion by 2011, and $75 billion globally. However, we should bear in mind that when the relatively lower value of advertising within nonmedia online activities is considered, the Internet’s potential share of all ad opportunities can fall dramatically.
Rich media and video spending will continue to grow reaching $1.35 billion (5%) by the end of the year. By 2011 10% of internet advertising will be rich media / video.
Trends
- Digital media solutions and targeted analytics will evolve differently for each adverting category.
- Sophisticated advertising formats and sales networks will be necessary to maximise placement across complementary digital media platforms including mobile, social, video and even game-like virtual worlds.
- Overall, the future outlook of online advertising may be in targeted advertising. However, this particular path still remains a double-edged sword: privacy is a huge issue and some advertisers will still opt for scale rather than niche user profiles.
- Over the long term, Google’s online ad monopoly is likely to end, as there are many new players with increasingly aggressive acquisition strategies.
- Data privacy will be a key consideration as players seek to make advertising more targeted. Serious issues were raised with Facebook over how it might use its members’ data, for instance serving relevant advertisements based on keywords in users’ profiles.
- Advertisers have traditionally paid significantly higher prices for advertising opportunities within media- related activities than for advertising opportunities within nonmedia activities. Developing non-media advertising solutions is key if online advertising is to fulfil it's promise.
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