Online advertising is increasingly attracting big spenders, with advertisers forecasting that online will represent a growing share of their overall media budgets over the next two years, especially within the FMCG and Entertainment sectors, according to new research from the European Interactive Advertising Association (EIAA).
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EIAA Marketers’ Internet Ad Barometer shows that 425 of those questioned already spend over 5% of their media budgets online and 74% of all those surveyed regard the internet as a vital component of their advertising strategy.
According to 80% of respondents, increasing broadband penetration is making the internet more attractive as a brand medium and online spend is forecast to rise by over 65% by 2008.
The Netherlands, the UK and the pan-European sector have the lead in terms of predicted spend, says the EIAA, but advertisers in Spain, Italy, France and Germany are boosting their online budgets to narrow the gap.
The EIAA also says that FMCG brands are embracing online, with the research showing that the percentage of overall media budgets devoted to online are forecast to rise from 6.5% in 2005 to 9.8% in 2008, a growth rate of 75%.
Internet advertising expenditure is predicted to experience a boost by both the higher and lower spenders of the sector over the next two years, with the higher spenders stating that 64$ of this extra spend has come from other media budgets and 57% of respondents claming the spend has been diverted from TV advertising.
In the entertainment sector, online ad spend represented 6.5% of overall media budgets in 2005 but is forecast to grow to 11.2% by 2008 with UK, Dutch and pan-European advertisers significantly increasing spend.
Caroline Slootweg, director – digital marketing & new media at Unilever, said: “It’s important for advertisers to understand what’s happening across the media landscape and within their own sector as they monitor the progressive shift to online.
Changing media consumption habits and the growing importance of digital technologies are prompting brands to review their media budgets and allocate an increasing proportion towards developing a consistent and strategic approach to online media.
Alison Fennah, executive director of the EIAA, said: “This study highlights the headway that online has made in becoming an integral part of the marketing mix.
“The higher online ad spenders are settling into an online strategy and steering a path for the lower spenders to follow, and this research highlights how they are catching up quick. Both groups are recognising the benefits of creative and targeted online campaigns and as confidence grows in the technologies and terminologies of the medium, so too does market share.”
Recent research from the Internet Advertising Bureau, PricewaterhouseCoopers and the World Advertising Research Centre said that online advertising expenditure reached almost £1 billion in the first six months of the year and looks set to overtake spending on national press advertising before the end of the year (see UK Online Adspend Nears £1 Billion).
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