European internet advertising exceeds €11bn

3 Jun 2008

Europe is fast closing the gap on the US in terms of online advertising, which grew in Europe by 40pc in 2007 to reach €11.2bn.

By comparison, the US online advertising market grew 26pc in 2007 to reach €14.5bn.

A report compiled by Interactive Advertising Bureau (IAB) Europe in collaboration with PricewaterhouseCoopers predicts the European online market will sustain the 40pc-a-year growth, despite predictions that traditional media may be impacted by an economic slowdown.

Two-thirds of European ad budgets – or some €7.3bn – were spent in the big three markets of the UK, Germany and France.

However, smaller markets covered in the report enjoyed extremely high growth rates, such as 91pc for Greece, 55pc for Spain and 49pc for Slovenia.

“We are well on the way to achieving the ’10 before 10′ – that is, 10 European countries where online advertising accounts for at least 10pc of overall ad spend by the year 2010,” said the president of IAB Europe, Alain Heureux.

“At the end of 2007, Denmark, Germany, Netherlands, Norway, Poland, Sweden and the UK had all reached this milestone.”

Using a new ‘spend per user’ metric to illustrate the value of an internet user to an advertiser in various markets, it found the European average was €80.60.

In Norway, this was €133.20 per person, followed by the UK at €120.80 and Denmark at €109.50.

IAB said the more mature the market, the higher the value placed on the internet by advertisers.

Sectors spending the most on online advertising are entertainment and leisure, telecoms and finance and insurance.

“Despite a slowdown in advertising spend on some traditional media, the rise of online advertising in Europe continues unabated,” Heureux explained.

“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.”

By John Kennedy