Online advertising in Ireland approaches €100m

27 Jul 2010

Online advertising now accounts for 10pc of total ad spend in Ireland, overtaking magazine and cinema advertising. Ad industry professionals predict strong growth for online in 2010.

Online advertising expenditure for 2009 reached €97.2m, according to the first IAB Ireland and PricewaterhouseCoopers (PwC) adspend study.

Bartley O’Connor, Advisory Consulting, PwC, said: “Online in Ireland has overtaken outdoor, magazine and cinema advertising, reflecting its move to centre stage. As it continues to grow and develop as a platform for entertainment, information and communication for Irish users, so too will the advertising revenues it will attract.”

This strong performance was recorded despite a particularly challenging economic outlook and its devastating effect on the general advertising industry. The total Irish advertising market is estimated to be worth €940m in 2009.

Study of online advertising

Results from the online advertising study show the second half of 2009 was stronger than the first, with online advertising increasing by €1.2m to €49.2m between July and December.

During the first half of 2009 it accounted for €48m. This was a remarkable performance in a year which saw newspaper, television and radio advertising revenues declining sharply.

The search format’s share of total Irish online adspend at 46.2pc mirrors the European market. IAB Europe’s 2009 online adspend study (Ad Ex) records a 46pc share for search across Europe. Irish classified and display formats achieved a 27.2pc and 26.6pc share respectively.

At 25pc, the recruitment/property sectors combined are the biggest spenders on online advertising, followed by autos at 20pc.

A key driver behind the growth of online advertising is the basic fact that more Irish people are online. According to ComReg’s Consumer ICT Survey, Q4 2009 internet usage grew from 64pc in Q4 2008, reflecting 2,830,144 users online, to 72pc in Q4 2009 with 3,210,696 users online.

ComReg’s study shows the average time spent online increased from 10 hours per week in 2008 to 13.2 hours per week in 2009. This reflects increased viewing time of online video, streaming TV and movies, as well as the dramatic growth in social media usage.

Eurostat recorded an increase in Irish home broadband connections from 43pc in 2008 to 54pc in 2009.

Indicators for growth

Some 75pc of the IAB PwC study participants predicted growth or strong growth for online adspend in 2010.

Suzanne McElligott, chief executive of IAB Ireland, said 2009 was a very challenging year for the Irish advertising industry.

However, it also marks the time when having surpassed 10pc, online advertising is set for stellar growth in Ireland. Her members say they are predicting growth of between 9pc and 10pc.

In mature advertising markets like the UK, online advertising is already ahead of TV and press advertising, while in Ireland the ranking is led by press, followed by TV, radio and then online.

“This is a really opportune time for online advertising in Ireland,” McElligott said, saying the industry has passed the line in the sand. “Nothing will be the same from here on.

“In 2009, advertising across the industry fell 20pc. The one growth area was online advertising where spend reached €97.2m. The key drivers for this were the increase in online usage in Ireland from 64pc to 74pc.”

In 2009, online surpassed TV in the UK and is now the largest medium. “The UK is a mature market now, with growth levels far lower than what we would be anticipating in Ireland.

“Looking forward, what we’ve seen across Europe, once online reaches 10pc of media share there is a tremendous growth. We are now at 10.3pc and that was during a period when the economy was most challenged.

“This is being driven by an increase in online access. We’re really bucking the trend and anticipating strong growth levels of 9pc in 2010,” McElligott said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years