Internet to take 15% of global ad spend next year

25/09/2009

Internet advertising is expected to account for about 15% of global measured advertising spending in 2010, up from an anticipated 13% in 2009, according to new report. The study, from GroupM, found that growth in display ads has fallen over the past several years as supply has run ahead of demand. In 2010 the report predicts that display spending is expected to hold a 34% share of online advertising, down from 35 percent in 2009, 37% in 2008, 38% in 2007 and 39% in 2006. By contract, spend on search ads has grown from a 38% share in 2006 to an anticipated 43% in 2010. The overall 15% figure represents an estimated $64.7bn (£39.72bn) globally and is an 11 percent increase over the previous year’s total.

The study, called Interaction, says that the uplift is being sparked by ad spending increases in both search and mobile and a continuing ad spending decline in traditional media.

Rob Norman, CEO of GroupM Interaction, said: “For several years the focus has been on the rapid rise of Google and the implications of its auction based pricing to advertisers and agencies. Today, search remains a key driver of digital marketing as advertisers compete to capture a disproportionate share of the intention that search behaviour represents.

“Now, however, the importance of influencing the organic listings has increased significantly, as has the focus on creating and capturing intent expressed in social media and micro-blogging actions. Search marketing is becoming intention marketing and is moving beyond results pages to activating and responding to the social graph.”

Looking at social media, the report said: “Social media continues its extraordinary growth in consumer adoption and interaction, but still little revenue in proportion to the total time spent or impressions available.”

Mobile advertising’s 2010 share of global ad spending is predicted to reach 6% of the total, accounting for a 19% increase to $3.3bn from $2.8bn in 2009. In 2008, GroupM estimates mobile ad spending was at $2.4bn.

In terms of future spending, the report predicted an even greater disparity with global display ad spending predicted to grow 5% to an estimated $20bn (£12.27bn) in 2010 while search is expected to show a 12% increase representing $25bn (£15.34bn) in spending.

The survey covered 36 countries and shows digital advertising’s share of total ad investment rising from 3.1 percent in 2001 to 14.6% in 2010.

It points out that Internet advertising has been the principal source of media investment growth in western nations since 2001 as spending in traditional media has levelled off and lately retreated.

GroupM is the parent company to WPP media agencies including MAXUS, MediaCom, Mediaedge:cia and MindShare.

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