Ad revenue gloom set to lift?

Online advertising revenues in the UK will grow by nearly 50 per cent a year to £1.3bn by 2005.

A report out today from Allegra Strategies claims new media marketing will account for 2.4 per cent of all UK ad spend by 2005.

However, not everybody is convinced by the growth forecasts, especially the prediction that email marketing spend will increase from the current figure of £12m to £382m within four years.

Tony Locke, an analyst with Bloor Research, said: "If the market stays as bad as it is now getting, that level of growth is very unlikely. Any forecasting is very much a lottery, it all depends on what's happening to the market in general."

A recent survey by Jupiter MMXI found online advertising prices are continuing to fall as supply continues to exceed demand.

With publishers typically only able to sell 40 per cent of their advertising space, the decline in ad revenues has been linked to a host of website closures over the past year, undermining confidence in investing online.

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