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Internet Advertising Market Assessment 2007
Key Note Publications Ltd, Feb 2007, Pages: 186
One of the main drivers of the market for Internet advertising continues to be the growth in take-up of Internet packages — and notably of broadband connections — by consumers over the past 7 years (since 2000). This has afforded and continues to afford greater opportunity for creativity in advertisement design, including the development of rich-media advertisements, which are more suitable for the faster broadband connections than for traditional dial-up connections.
Expenditure on Internet advertising is expected to have continued rising at a strong rate during 2006, reflecting confidence in online advertising by the marketing community, and securing the position it had established since 2003 as the fastest-growing advertising medium.
Paid-for search marketing, first adopted in 2001, largely by online businesses in the travel and finance sectors, continues to be an increasingly important element within the Internet advertising mix. It is popular with media buyers because it is simple and its success is easily measurable.
A turf war is developing among online advertising agencies. Small, independent agencies — which have emerged as a result of the lack of confidence in the market in the early 2000s — are being challenged by big, traditional agencies, which are restructuring to put digital media at the heart of their strategies.
One of the most important barriers to Internet advertising reaching mainstream status in terms of advertising media has been the difficulty in measuring how effective it is. As a result, November 2004 saw the launch of a global standard for counting online advertising impressions. This marked some firsts in the advertising industry: not only was this the first global measurement standard of its kind, but it was also the first time the advertisement itself had been measured as delivered to the consumer (versus other media that measure the programming or content).
The original research found that 93% of respondents who had accessed the Internet in the 12 months leading up to the survey could now access the Internet at home. The survey also revealed that 78% of those who had used the Internet in the previous year had broadband Internet access, at home, at work or in their place of education.
Online shopping is now well established in the UK; 85% of all Internet users identified by our survey had personally bought goods or services over the Internet. However, a relatively high proportion (36%) of respondents were deterred from Internet shopping by the risk of fraudulent card use online.
The marketing of websites through other media continues to be successful. In addition, the percentage of Internet users who had been directed to websites from advertisements on other sites was an impressive 61%, according to the research findings.
A quarter of Internet users said that they had clicked on Internet advertisements, while 52% said that they thought rich-media Internet advertisements that included music and/or animation worked better or attracted more attention than those without. However, despite this implied interest in online advertising, 73% of Internet users stated that they had software that blocked Internet advertisements.
E-mail marketing was acceptable to 38% of Internet users, but only 9% of respondents who had used the Internet in the previous 12 months agreed that they had been influenced to visit certain websites online by messages sent to their mobile telephones, containing information or advertising about websites.
We forecasts that the Internet advertising market will continue to grow at a strong pace for the next 2 years (2007 and 2008) and maintain a steady momentum thereafter to 2011.
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