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Online bucks the advertising spend trend

The internet is continuing to prove the medium of choice for advertisers as they seek to maximise ad spend budgets, according to new research from the EIAA. 81% of advertisers claim that their allocated online ad spend has grown in 2008 and predict that it will continue to do so over the next couple of years (+16% in 2009 and +17% in 2010). 82% of advertisers who have seen an increase in their online spend admitted it is coming directly from the likes of print media (40%*), TV (39%*) and increasingly DM (32%*) budgets. This is backed by the fact that three quarters (73%) state that they are increasing their use of online as an advertising medium whilst 31% of advertisers claim their use of TV is decreasing and 40% cite a decrease in the use of newspapers. The EIAA Marketers' Internet Ad Barometer, was commissioned by the EIAA to provide valuable insight into the role online advertising plays in the marketing mix and attitudes towards the internet amongst key advertisers across Europe. The results reveal that online is playing an increasingly important role in overall advertising strategies with 38% of advertisers now regarding online as essential (vs. 17% in 2006). Brand Benefits Indeed, advertisers are increasing recognising the value and impact of online advertising. Over three quarters (77%) of those questioned found online advertising to have a positive impact on the perception of their brand as well as overall brand awareness (68%). It also seems that results are translating directly into spend with more than half (55%) planning to increase their brand advertising budget over the next couple of years. In addition, 40% of advertisers now view the internet as very important in influencing purchase decisions (up from 30% in 2006), in generating sales (46% vs. 31%) and in increasing customer loyalty (23%). Format Focus Taking a deeper dive into online budget allocation, spend is increasingly being focused in three key areas. Display remains the dominant format taking 38% of spend (up 9% from 2006) whilst search and affiliate advertising are experiencing rapid growth (up 35% and 25% respectively since 2006). According to 80% of respondents, their search spend is predicted to increase in the next two years while 59% will be investing more money into display. Multi-national Online Ad Budgets According to the research, advertisers are currently allocating an average of 11% of their online ad spend budgets at a pan-regional rather than country level. On average pan-regional advertisers have also seen a higher year-on-year growth rate in their online advertising spend in 2008 than their local counterparts (24% vs.21%). Multi-national Campaigns across Europe In order to understand how pan Regional online media budgets can be planned and implemented the EIAA have studied the footprint of multi-national online display ad campaign activity. Multi-national campaigns on EIAA members' networks have been analysed by PwC by buying point across Europe and beyond over a 3 year period. In addition, further research has been conducted, also by PwC on behalf of Microsoft Advertising into multi-national media buying. The research shows that advertisers in Europe are seeing that pan-regional deals can complement local media plans and add an additional layer of value as well as control of media effectiveness and spend. Multi-national campaigns† are now being planned and bought from all European markets with the majority originating in UK, Germany and France. Multi-national campaigns with a European element are also being bought from the Americas and Asia. Based on these reports multi-national online display ad campaigns are estimated to have grown in value by 150% over the last 3 years, indicating a faster growth rate than locally bought campaigns‡. In terms of spend multinational display campaigns are forecast to generate over €175 million in net revenue in 2008. "This research shows that while other forms of media are suffering from slowing spend, online continues to take a growing proportion of advertising budgets as brands increasingly recognise its impact, value and potential ROI, "said Alison Fennah, Executive Director of the EIAA. "Advertisers in Europe are also starting to realise the economic and operational benefits that are offered through the adoption of pan-regional online strategies." EIAA Marketers' Internet Ad Barometer 2008 Methodology The survey was conducted online with senior marketing executives with responsibility for advertising budgets and/or strategy across UK, France, Germany, Italy, Spain, Netherlands, Belgium, Norway, Sweden and the pan-Euro sector. The following sectors were included: FMCG, Entertainment, Automotive, Travel, Consumer Electronics, Telecoms, Finance and Retail. Source:

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