Internet ad spend will keep growing despite the recession, but the nature of the spend will transition from display ads to online alternatives, writes AdAge.
Total internet ad spending in the Europe, Middle East and Africa region will grow from $19.4 billion in 2008 to $25.2 billion in 2013, stated PricewaterhouseCoopers.
But online display ads will decline, dropping to $4.8 billion from $5.1 billion overseas, and to $4.4 billion in 2013 from $4.8 billion in 2008 in the US. The forecast states that display will decline over the next two years but start growing again in 2011. In the meantime, search will continue to grow through 2013.
Marketers are diverting more and more online spend to search because of its accountability and the increasing sophistication of search analytics.
The search engine is the new home page for brands and businesses, says Neil Eatson, UK head of media and search at AKQA, adding that people don't see home pages anymore because 80% of web use begins with a search engine. Google, MSN, and Yahoo have effectively become the most cost-effective form of advertising, he noted.
Search is becoming more expensive as well as more desirable. Brands are competing for search terms and pushing prices up, which also helps to explain the shift of money away from display, where rates are plummeting.
Besides search, there are an increasing number of online options to choose from, making marketers less reliant on channels such as display, instead choosing new routes to a site or a campaign, e.g., social media. Brands are also creating their own media, using sponsorship, widgets, and microsites to generate interaction.
Once the downturn passes, marketers are expected to ramp up use of display, if only for branding purposes.
A report published last month stated that the European online advertising market was worth €12.9 billion, having grown 20% in 2008. Though the overall rate of pan-European growth remained close to 2007 levels, spending slowed significantly in the top 10 most mature markets and resulted in 2008 being one of the worst years for advertising in any medium.<
