European online marketing to hit €16bn

13 Jul 2007

Online marketing across Europe is expected to top €16bn by 2012 from €7.5bn last year, driven by trends in email, display and search advertising.

Analyst firm Forrester predicts that by 2012 online marketing will make up 18pc of total media budgets.

Audience attention is moving online, claims Forrester, with 36pc of online Europeans saying that they watch less TV because they are online.

Trust in other forms of advertising is eroding. Some 67pc of online consumers believe that advertisers don’t tell the truth in ads.

Overall marketing spend is growing again in Europe in 2007 after several slow years and 54pc of companies have set their 2007 budgets higher than their actual spend for 2006.

Online display advertising remains universally popular with almost all of the 25,000 European consumers surveyed using banner ads.

Spending on display advertising – banners, buttons and pop-ups – will grow from €2.5bn in 2006 to €5.6bn in 2012.

As the number of Europeans with home broadband access rises from 47m to 83m by 2012, Forrester predicts that existing internet advertisers will ramp up their spend and expand into new formats such as rich media.

“An expanding interactive marketing universe doesn’t just mean more budget,” said Forrester Research senior analyst Rebecca Jennings.

“Over the next few years, the shift of online marketing from experiment to mainstream will force marketing organizations and processes to change.”

Jennings predicts that as different types of social media like MySpace and peer reviews strengthen their grip on users, expect marketers to jump on the bandwagon by switching ad spend to social media forms like RSS, blogs, and networks.

“The recent rash of acquisitions within the online marketing space — such as Microsoft’s acquisition of aQuantive and Google’s purchase of DoubleClick — presents marketers with easier routes online through integrated media operations and will drive up spend and innovation,” Jennings said.

By John Kennedy