Search to lead online ad recovery in 2010

24/08/2009

Search advertising is set to lead the recovery in European online ad spend next year, while email, classifieds and display ads have been hardest hit by the recession, according to new research. The IAB’s latest Europe’s annual AdEx study indicates that overall online advertising in the UK will fall 0.4% this year, but ad spend is expected to rise 2.4% next year, the IAB predicted.

Across Europe, search will grow 8% in 2009, representing almost half (46%) of the total online ad market in the continent. In contrast, growth in online display will grow just 0.4% across Europe, hit by a drop in branding advertising and falling rates. Meanwhile, classifieds fell 4.7% in 2009, hit by downturns in the property, job and car market.

In 2008 online advertising grew 20% in Europe compared to the previous year. However, some of the most mature and recession-stricken markets - the UK, the Netherlands, Norway and Sweden – were already experiencing a significant slowing of growth whilst underdeveloped markets enjoyed double-digit growth rates.

UK online ad spend to dip in 2009

UK display ad spend will be down 4% from 2008 to 2009, to €628.5m, but it is expected to increase 3% to €647.4m in 2010. In contrast, UK search advertising is forecast to post an increase of 3% in 2009, to €2,102m, and is expected to rise 4% next year. Email advertising has been the worst affected by the credit crunch in the UK, with spend down 50% this year and is expected to decrease further by 30%, to €3.7m next year.

Sticking with ‘tried and tested’ formats

The research also indicated that whilst emerging digital formats such as social media, in-game and mobile advertising are appealing, in the short term most advertisers and planners will opt for tried and tested formats such as search, ‘traditional’ advertising and, increasingly, video display.

Search in particular will benefit from this trend because of it can deliver measurable results that impact the bottom line.

Mobile advertising is also predicted to grow this year. Compared to display and search formats, the mobile platform opens up a whole new world of opportunities, such as location-based advertising and social networking.

New formats specifically designed for mobile are starting to appear – for instance sponsored, free downloadable apps for iPhones and other smartphones that allow brands to engage in a relevant and friendly way with users.

Recovery forecast for 2010

The IAB report predicts that this ‘pause for breath’ in the online ad economy will end in 2010 when the market will begin to thaw, resuming its growth trend. Some 70% said they were planning to spend more money advertising online in the current year, although overall ad spend would be down double-digit.

Screen Digest carried out a survey of major European advertisers for IAB Europe in May 2009.

Source: IAB Europe

24/08/2009

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