Europe Online Ad Spend Will Soon Well be over that of US

IAB Europe, an organization which promotes the European digital and interactive marketing industry, in its recent report stated online ad spend across Europe would experience double digit growth with a likelihood of overtaking the US by next year. Last month, the organization had predicted that advertising-supported web services to deliver €100bn in value to consumers in 2010, rising to €190bn by 2015.

Alain Heureux, president and CEO of IAB Europe informed, “Every day new companies plan online ad campaigns for the first time, encouraged by reach, return on investment and consumer engagement.” He was speaking on the basis of a data compiled from its branches in the UK, France, Spain, Italy, Poland, Hungary, Bulgaria and Romania.

Heureux said besides companies already online were allocating a greater proportion of their ad spend to the medium is also seeing fantastic results for cross-media campaigns incorporating TV, radio and outdoor. The report of audited online ad spend for the first six months of 2010 witnessed Spain recording 20 percent growth followed by Poland 18pc, Italy 15pc, Hungary 11pc, UK, France and Bulgaria with 10pc and Romania at 8pc.

Last month, Heureux had pointed out “Online advertising is being debated around the globe, yet until today, there has been little robust and independent research into the huge value generated by the ‘free’ advertising-supported web services that we all use every day. McKinsey & Company’s research shows that online advertising plays a strong role in enabling new services and content distribution models, as well as its traditional role in supporting the creative industries.”

The latest results on ad spend will continue to feed the free web services that consumers receive through the funds from online advertisements. According to IAB, for every euro spent on online advertising by brands, users get three Euros worth of services.

McKinsey estimates that in 2010, the consumer surplus generated by online advertising in Europe and the US will be €100bn, which equates to around €40 per household per month. This is nearly as much as consumers spend for their annual internet access subscriptions (€120bn). McKinsey anticipates that the surplus will grow on average (CAGR) by 13pc, to €190bn by 2015.

By Jose Roy