Online advertising trends

Many thanks to Danny Meadows-Klue at Digital Stategy Consulting for his regular news round-up, which I've selected from here. His summation is:

There's a polarizing effect in the digital media and marketing sectors: firms with good business models, strong products and great people are weathering the storm, but those without are seeing sustained revenue falls as customers shift.Recession is accelerating structural change, forcing brands to find new ways to connect with customers and improve their supply chains and value chains.
This is across retail, media and marketing services and is unlocking new disruptive business models. What emerges after the storm has passed will be an advertising and media industry with a fundamentally different structure. Our review of the last month's research and company announcements confirms this. The vast majority of advertisers are boosting their online spend, while heavily cutting classic media. Social networks continue to leap forward - with Facebook putting on 50m new customers since January to cross the 200m mark - and the race to own the mobile space has never been faster.

Online ad expenditure up 17% to reach £3.35bn in 2008

Online adspend in the UK grew 17.1% during 2008 to reach £3.35bn, a year-on-year increase of £540m, according to IAB UK's bi-annual online advertising expenditure study. In comparison, total UK advertising fell 3.5% in the same period to £17.5bn. In total, online advertising accounted for 19.2% of all UK advertising during 2008 (from 15.5% in 2007). However this peaked at 19.8% in the second half of the year, overtaking total press display advertising. The UK is now the world's leading online advertising market: £1 in every £5 of ad budgets is spent online.Paid-for search remained the leading sector, accounting for 59.3% of all online advertising, with year-on-year growth of 22.7% (to £1.987bn).

IAB UK: http://www.iabuk.net/, 01/04/2009

US online adspend tops $23.4bn in 2008

The latest Internet Advertising Revenue Report from the IAB US and PricewaterhouseCoopers reveals that total online ad revenues totalled $23.4bn (£15.77bn) in 2008, up 10.6% on 2007 ($21.2bn or £14.28bn). The figures represent the fifth year of consecutive record results, although growth slowed by 50% to the lowest rate since 2002. Q4 revenues reached a record $6.1bn (£4.11bn), passing the $6bn barrier for the first time on year-on-year growth of 2.6% (up $154m (£104m) for $5.9bn (£3.98bn) in Q4 2007). Search advertising continues to hold the lion's share of online adspend accounting for 45% of revenues ($10,546m or £7.11m) from 42% in 2007 ($8,805m or £5.93m).Projections from eMarketer for 2009 expect growth to continue to slow, reaching 4.5% during the year on total online adspend of $24.5bn (£16.5bn). However, much bleaker figures from Screen Digest predict a 5% fall in online adspend during 2009.
IAB US: http://www.iab.net/, 30/03/2009

70% of European advertisers increase online ad budgets

The annual Internet Ad Barometer report from the European Interactive Advertisers Association (EIAA) has found that 70% of European advertisers intend to increase their online adspend during 2009. In addition, only 8% of firms are intending to cut their online budgets this year. Advertisers are primarily cannibalising other media budgets in order to fund the increases: 37% of firms are cutting TV budgets, 32% are cutting newspaper budgets and 46% are cutting magazine budgets. Online is increasingly playing a bigger part in ad strategies and 47% of firms now see it as "an essential factor within the marketing mix" (up from 38% in last year's study). 16% of advertisers are now also increasing their pan-regional campaigns (from 11% in 2008).
EIAA: http://eiaa.net/, 22/04/2009


Global online adspend to grow 8.6% as total media budgets fall

The latest forecast from ZenithOptimedia predicts that global media spend will decrease by 6.9% during 2009, writes Brand Republic. In particular the firm expects drops of 8.7% in the UK, 8.3% in the US, 5.5% in Germany and 5% in Japan. All forms of media will see cuts except for online which is predicted to grow 8.6% worldwide this year to $54bn (overtaking magazines for the first time). Online's share of global adspend will also grow, from 10.4% in 2008 to 12.1% in 2009, Only television will also increase its share (from 38.1% to 38.6%) though actual spend will fall 5.5% to $173bn.The firm now expects positive growth to return in 2010, with the global spend forecast to rise 1.5%.
From Brand Republic: http://www.brandrepublic.com/, 14/04/2009
ZenithOptimedia: http://www.zenithoptimedia.com/


Bellwether report sees signs of confidence

The IPA's latest Bellwether survey indicates that the rate of adspend budget cuts slowed in Q1 2009, writes Brand Republic. The IPA also found that the number of firms with positive outlooks grew from 5% to 14%. The IPA believes that the bottom of the market has now been reached, although the majority of firms are still reporting advertising budget cuts. However the proportion of firms who believe that their prospects are worsening fell from 63% last quarter to 44%.In total, traditional media (including television, press, radio and outdoor) saw cuts of 34% during Q1. Online advertising and search also saw budget cuts, though these remained much lower at 10% and 2.4% respectively. Overall though, online continued to grow its share of total UK ad budgets at the expense of other sectors.
From Media Week: http://www.mediaweek.co.uk/, 06/04/2009
IPA: http://www.ipa.co.uk/


70% of European advertisers increase online ad budgets

The annual Internet Ad Barometer report from the European Interactive Advertisers Association (EIAA) has found that 70% of European advertisers intend to increase their online adspend during 2009. In addition, only 8% of firms are intending to cut their online budgets this year. Advertisers are primarily cannibalising other media budgets in order to fund the increases: 37% of firms are cutting TV budgets, 32% are cutting newspaper budgets and 46% are cutting magazine budgets. Online is increasingly playing a bigger part in ad strategies and 47% of firms now see it as "an essential factor within the marketing mix" (up from 38% in last year's study). 16% of advertisers are now also increasing their pan-regional campaigns (from 11% in 2008).
EIAA: http://eiaa.net/, 22/04/2009


Global online adspend to grow 8.6% as total media budgets fall

The latest forecast from ZenithOptimedia predicts that global media spend will decrease by 6.9% during 2009, writes Brand Republic. In particular the firm expects drops of 8.7% in the UK, 8.3% in the US, 5.5% in Germany and 5% in Japan. All forms of media will see cuts except for online which is predicted to grow 8.6% worldwide this year to $54bn (overtaking magazines for the first time). Online's share of global adspend will also grow, from 10.4% in 2008 to 12.1% in 2009, Only television will also increase its share (from 38.1% to 38.6%) though actual spend will fall 5.5% to $173bn.The firm now expects positive growth to return in 2010, with the global spend forecast to rise 1.5%.
From Brand Republic: http://www.brandrepublic.com/, 14/04/2009
ZenithOptimedia: http://www.zenithoptimedia.com/



Facebook signs up 200m users

Facebook has added over 50m new users since January 2009, bringing its total membership to over 200m - nearly half of whom are in Europe, writes Brand Republic. Worldwide over 500,000 new users are joining the site every day. According to the figures more than one in four people with internet access visited Facebook in February. Significantly the majority of new users are no longer of student age - during the first quarter the fastest-growing segment of Facebook's US population was aged 26 to 44. Data from comScore also shows that Facebook accounts for one third of all social networking in Europe. In February 2009 Facebook accounted for 4.1% of all minutes spent online in Europe, up from 1.1% in the year before. The site's largest European audience is in the UK with 22.7m visitors (up 75% year-on-year).According to Silicon Alley Insider, if Facebook were a country, it would come fifth in the world after China, India, the US and Indonesia.
From Brand Republic: http://www.brandrepublic.com/, 09/04/2009
Facebook: http://www.facebook.com/