Internet advertising to buck advertising trend

6 May 2008

Internet advertising could still grow 15pc in 2008, even if the economic downturn causes a 5pc decline in overall advertising spending, analyst firm Gartner has claimed.

This is because economic pressures will force advertisers to look for ways to reduce risk by demanding more accountability for results from advertising partners. Digital media specialists can fulfill this requirement, leading to opportunities for advertising agencies, large portal and ad networks and large publisher-consortium-based networks, according to Gartner.

“Companies contemplating an economic downturn are likely to make adjustments to their marketing return-on-investment models,” said Andrew Frank, research vice-president at Gartner. “As they seek to shed risk from marketing investments, programmes that seemed sound months or even weeks ago are rendered unacceptable.”

In the long term, the disparity between online media usage and online ad spending will continue to drive the share of advertising from traditional to digital channels. In the short term, Gartner predicts that even if an economic downturn in 2008 results in a 5pc decline in overall advertising spending, internet advertising spending could still grow 15pc.

In that case, however, internet advertising would gain a mere two percentage points of share to 11pc of worldwide advertising overall, still significantly trailing the internet’s growing consumer time share, compared with other media.

“What is certain is that the anticipated decline in economic conditions will result in uneven pressures that are likely to forge a more efficient value chain of buyers, sellers and intermediaries,” added Frank. “This, in turn, will have direct implications on the marketing technology strategies and priorities and both the buying and selling side of the digital media market.”

By Niall Byrne