Digital agencies look set to reap the benefits of the surge in online advertising with a new survey from online research firm E-consultancy showing that daily fees for companies are up by 11% since 2003, and are expected to rise by 8% over the next 12 months.
Out of 328 agencies, 96% were optimistic about future revenue growth, with 11% increasing at 100% or more a year. On average the survey found that agencies were forecasting year-on-year revenue rises of 31% for 2005.
Commenting on the report’s findings, Ashley Friedlein, chief executive of E-consultancy said: “Now that consumers are accessing a greater range of digital touch points with greater frequency, businesses are increasingly realising the necessity for incorporating digital channels as an integral element of their strategy.”
This finding is echoed in the latest figures for UK adspend from the Internet Advertising Bureau, which show online advertising expenditure to have increased by 62.3% in the first half of 2005, resulting in the medium being forecast to pass £1 billion by the end of 2005 (see UK Online Adspend To Pass £1 Billion).
Speaking about the results, Guy Phillipson, chief executive of the IAB, claimed that “marketers are recognising the internet’s full potential and are actively driving budgets into online advertising.”
This opinion is confirmed by recent research published by online magazine, Direct, which revealed that increasing awareness in online advertising has resulted in marketers shifting their adspend onto online, with 60% planning to raise their online advertising expenditure in 2006 (see Marketers Move Adspend Online).
According to Direct, marketers are allotting 41% of marketing budgets to online channels this year, taking money away from traditional direct marketing channels. The survey found that marketers allocated 75% for traditional media channels last year, compared to just 59% this year.
Related Links
