Latest forecasts from Optimedia show online adspend reaching £100m during 2000. This represents a 150% year-on-year increase and appears to defy recent claims of a downturn in the sector. During 2001 the market will continue to perform well, with revenue from advertising predicted to reach £210m, a growth rate of 110%.
Since first including internet advertising in its revenue estimates, however, Optimedia’s long-term forecasts for the medium have undergone some revision. Forecasts released in 1999 and 2000 by the group estimated that net adspend would reach £120m during 2000, but the latest data for last year show a growth level 25% less than these original forecasts. During 2001 the medium was expected to take £250m in annual revenue, but this figure has now been reduced to £210m.
The sector still holds its position as one of the fastest growing markets of all time and Optimedia believes the medium will overtake cinema in ad revenue terms within a year. The hype of the new media boom now having waned, however, a slightly more conservative view of the sector is emerging.
Anthony Jones, European research director at Optimedia, said, “What we are witnessing is the growth of more traditional advertisers on the net. Start-ups from last year have been and gone and now we are seeing increased use of the medium by mainstream companies.”
In particular, holidays, IT and telecoms are booming sectors, although the difficulties in gaining accurate data for online ad expenditure remain. Producing costs per thousand estimates is virtually impossible on the net due to the hybrid pricing systems which surround the new medium. As a measurement system CPT is also least relevant when applied to the internet.
Emerging in its place is a far more accountable system of measurement – adserving technologies such as DART – which provide more useful return on investment (ROI) data for advertisers. Using such systems it is possible to count the exact number of people who have clicked on an ad and the proportion who have then ordered or bought something from the site.
It is such accountability which, Optimedia believes, will drive the medium, and their research has found that while the average click rate for banner ads has been falling, the ROI measures have improved.
“Adserving technology marks the future for accountable online ad campaigns. Any agency which doesn’t use it is doing a disservice,” Jones said
