Online Advertising Growth To Outperform Market, But Remain ‘Poor Relation’ To Broadcast

The amount and share of advertising spend which is placed on the internet are both set to soar over the next few years, but television will remain the marketers’ preferred medium. These are some of the latest findings from Fletcher Research’s Internet AdWatch survey.

As the UK’s online population is set to explode – growing to over 24 million adults by 2003 – the advertising industry is gradually coming around to the medium’s potential as a marketing platform, says Fletcher.

Marketers who currently include online inventory put aside an average of 7% of their budget for internet advertising. This figure is set rise to 16% by 2004. Alongside this, online advertising expenditure is expected to grow from £50 million in 1999 to £479 million in 2002. However, television will remain the preferred platform for mass consumer advertising over the next four years and beyond, according to Fletcher’s forecasts.

Caroline Sceats, business analyst at Fletcher Research, says: “The current spate of high-profile TV campaigns by UK internet companies indicates a ‘gold rush’-like imperative to achieve mass brand awareness among consumers. And while many of these consumers have yet to embrace the internet, this significant off-line ad presence underlines the internet’s massive commercial potential, particularly for consumer retail.”

Indeed, early indications show that television revenue is already showing a substantial year on year growth largely driven by dotcom advertisers forging their way into the market (see New Year Marked By Surge In Advertising Revenue). “Our research indicates that off-line advertising by dotcoms is already proving to be a winning strategy. It’s clear that those internet companies which spend heavily on TV advertising, quickly achieve far greater brand awareness than those that don’t,” adds Sceats.

Fletcher Research: 020 7631 0202