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Internet ad spend outperforms all other media

Internet ad spend outperforms all other media

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 a new GroupM study.

The figure represents an estimated $64.7 billion globally (£39.8bn), an 11% increase over the previous year’s total.

The hike is being sparked by ad spending increases in both search and mobile and a continuing ad spending decline in traditional media according to the Interaction report.

Internet ad spending has outperformed all other media throughout the recession over the past year and into the current recovery. In terms of spending, the report predicted global display ad spending predicted to grow 5% to an estimated $20 billion (£12.3bn) in 2010 while search is expected to show a 12% increase representing $25 billion (£15.3bn) in spending.

Mobile advertising’s 2010 share of global ad spending is predicted to reach 6% of the total, accounting for a 19% increase to $3.3 billion (£2bn) from $2.8 billion (£1.7bn) in 2009.

The survey covered 36 countries and shows digital advertising’s share of total ad investment rising from 3.1% 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 leveled off and lately retreated.

In 2010 display spending is expected to hold a 34% share, down from 35% in 2009, 37% in 2008, 38% in 2007 and 39% in 2006. Search, meanwhile, has grown from a 38% share in 2006 to an anticipated 43% in 2010.

But, in the lead up to the digital switchover, major newspapers and magazines are continuing to suffer with audience numbers declining and advertisers straying.  

Consumers have little appetite for paying for news and entertainment content that is available free elsewhere. Meanwhile, video has taken over from social media as the new digital darling. As owners of professional quality video content allow more video to be broadcast online, consumers are responding enthusiastically.

Display is increasingly dominated by ad networks and others whose mission it is to drive measurable return on investment. And while social media continues its extraordinary growth in consumer adoption and interaction, there still little revenue in proportion to the total time spent or impressions available.

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 behavior 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."

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