In February, 2005 adspend for both the UK and US was revealed, with the internet fuelling revenue growth across both sides of the pond.
According to figures from Thompson Intermedia, advertising expenditure in the UK rose by 5.4% year on year in 2005, with TV adspend up by 4%, reaching £4.2 billion (see
UK Adspend Up By 5.4%).
Meanwhile, in the US, data from TNS Media Intelligence showed that total advertising expenditure in 2005 increased by 3% year on year, with internet display adspend enjoying the largest gain, up to 13.3% to $8.3 billion (see US Adspend Up By 3% In 2005).
Across the board, the internet, was cited as the dominant force behind adspend growth, with broadbands increasing adoption rate being a large factor in online advertising expenditure.
According to WPP’s OgilvyOne Report, Europe has overtaken America as the second largest broadband market in the world. The report claims that total online household penetration in Western Europe will reach 63% by 2010, with 93% of connected homes expected to use broadband to access the internet (see Europe Pushes Broadband Uptake Forward).
Looking at the UK, the latest figures from the Office of National Statistics (ONS) confirm this trend, with broadband making up 64.2% of all connections in December 2005. In contrast, dial-up is losing market share, accounting for 35.8% of internet connections (see Broadband Accounts For 64% Of UK Internet Connections).
Leading off from the internet’s success, local search is a division of online advertising that is expected to enjoy a particularly strong performance over the coming years. A report from Kelsey Group forecast local search to rise by 30.5% over the next five years, reaching $13 billion by 2010 (see Online Local Search To Reach $13 Billion By 2010).
This trend is confirmed by Outsell, with research predicting search engine advertising to rise by 26% in 2006, compared to print increasing at 3.3% and TV at 3.3% (see Online Local Search To Reach $13 Billion By 2010).
Outsell claim that total online marketing spend will grow by 19% in 2006, eight times more than TV and radio and six times that of print.
Despite this expected strong growth, research released by Parks Associates claims that overall broadband penetration in the US is stagnating, with the lack of newcomers to the internet expected to result in limited growth in overall broadband penetration (see Internet Subscribtions Facing A Lull).
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