Online advertising set to make a comeback

18 Dec 2003

Internet access and internet advertising spend in Europe is expected to continue growing rapidly, at a 7.4pc compound annual increase between now and 2007. Taken on its own, online advertising is expected to achieve double-digit growth in the same period. These are some of the findings of PricewaterhouseCoopers’ Entertainment and Media Outlook: 2003-2007 Europe, published today.

Overall spending on entertainment and media is expected to increase across the six countries covered in the report (UK, France, Germany, Italy, Spain and the Netherlands) by a 3.4pc compound annual growth rate (CAGR) to €243bn in 2003. This is up from €205bn in 2002.

Ireland is not covered in the report but the equivalent report last year which did include Ireland valued its overall media and entertainment industry at over €1.9bn in 2003 and predicted it would rise by 5.5pc compound annual growth rate to over €2.4bn by 2006 (excluding the wireless market).

Digital media is expected to account for a growing proportion of this spend, according to Ann O’Connell, partner at PricewaterhouseCoopers Ireland: “While Ireland’s digitial media industry is at an early stage of development, there are over 300 companies currently in the sector employing approximately 4,500 people and this sector is expected to show strong activity over the coming years.”

The report predicts that the number of broadband subscribers in the majority of the six countries surveyed will more than treble during the 2003-2007 period. The growth of broadband will affect the piracy of filmed entertainment but to a lesser extent than the internet has affected the recorded music industry.

Another key finding is that multichannel television will continue to grow, though at a slower rate. The main driver will be satellite and by 2007 cable will have lost its dominance, having a lead of only 1.3 million more households than satellite.

Robert Boyle, European leader, Entertainment & Media practice, PricewaterhouseCoopers, commented: “Consumer adoption of new next-generation technologies will offset the impact of ageing platforms in internet and TV. The music industry, so heavily impacted by piracy and the illegal download of content will begin to fight back by 2007 as suppliers develop legitimate download channels and cut prices to consumers.”

By Brian Skelly