New media
For Europe, boom year for internet ads
By Heidi Dawley
Jan 9, 2007, 01:05

For years now internet advertising spending has been growing at a fast clip in Europe, as in the world more broadly.

As 2007 gets under way, media buyers are expecting more of the same.

“The mood is still buoyant among buyers. The internet is where most of the interest is at the moment,” says Jonathan Barnard, head of publications at ZenithOptimedia in London.

The forecasts for strong growth back up that positive feeling. Group M forecasts that internet advertising spending growth in Western Europe will be 33.5 percent in 2007. ZenithOptimedia puts that figure at 28 percent, which is actually in line with the company’s global forecast of 28.2 percent, though down from 2006.

“Growth is unmistakably strong and the most likely to be revised of any of the forecasts because the internet keeps on surprising us," says Adam Smith, futures director at Group M. "The number of brands using it and the weight of the money they commit to it tends to always be higher than predicted, particularly in Europe.”

Among the European markets, growth projections vary widely, yet all countries are expected to see robust increases. Denmark comes in the lowest, with projected growth of 16 percent this year. Portugal comes in at the top at 50 percent growth, according to ZenithOptimedia projections.

The variations speak to the diversity of European economies, even within the tight political and monetary connections that bind them.

“It is very much market by market generally,” says Barnard. “There is some pan-European internet activity, but most is still country by country, mostly because of the language and cultural barriers.”

When it comes to internet advertising, the performance of one country in particular, Britain, counts for a lot, according to GroupM’s Smith. “Half of European internet money is the UK, so the UK figure is pretty much going to determine the Europe headline,” he says.

As much as anything, that reflects Britain's much higher broadband penetration. Plus, connected folks aren’t shy about spending online. As spenders, they are heavily targeted by marketers who in other countries might use more traditional media, such as magazines.

For 2007, Smith forecasts that internet advertising in Britain will grow 36.2 percent, just behind 2006's 39.1 percent.

France and Germany lagged Britain and the U.S. in coming out of the most recent economic recession, and they paced well below each in the growth of web ad spending. But with their economies now improved, internet spending is much stronger. Group M is predicting growth of 40 percent for France and 25 percent for Germany, versus 30 percent for each in 2006.

In the case of the UK, Dominic Fawkes, senior planner/buyer at London-based DNA, an Avenue A| Razorfish company, thinks the forecasts are on target. "Every year gets better," he says. "Clients are getting more savvy and realize that they can't just rely on paid search. They have to expand out. It's going to be an interesting year."

But Fawkes believes the year will be challenging for media buyers, and that's in part because as clients put more money into online, the premium advertising spaces will be sold out and buyers will have to find other places to place their ads.

Buyers will also be challenged to figure out how to best use social networking and blogs and some other newer areas of online advertising. Then they must interpret the results.

"For a planner/buyer it is a lot more complicated," Fawkes says. "They already have the client on board with the idea of online advertising, and the client understands the basics, but they don't fully understand blogs and they don't fully understand social networking. So they are looking to agencies to come back with the answers.

"But agencies don't fully have the answers, so in 2007 there will be more testing and investigation."

Meanwhile, in online ratings for the week ended Dec. 31, the top five parent companies were Microsoft, Google, Yahoo, Time Warner and News Corp. The top five brands were Yahoo, Google, MSN/Windows Live and Microsoft.

Experian Group was the top advertiser with 6.48 million impressions, followed by Time Warner with 3.19 million, Verizon with 2.24 million, NexTag at 2.13 million and Bank of America with 1.88 million impressions.

Sessions per person dropped 6.67 percent over the busy holiday week to 14, but domains visited per person were steady at 35. PC time per person was down 9.01 percent to 13 hours, 44 minutes and 16 seconds.