Online ad revenues booming

The online advertising market looks to have once again found its feet in 2003 and could sustain such growth over the next two years. The sunny spell for in the advertising forecast is due to an increased number of subscribers switching to broadband and more users signing up to e-commerce promotions.

After three years in the doldrums, internet advertising in Europe should hit double-digit growth in 2003, according to a study from consultants PriceWaterhouseCoopers (PWC) in collaboration with central buying service for ad space, Zenith Optimedia.

This year, web ad revenues should grow by 10.2 per cent compared to 2002 in six key European countries – France, Germany, the UK, the Netherlands, Italy and Spain – reaching €886m, according to analysts' predictions. And that's not all – the double-digit growth will carry on until the end of 2005, falling back to 8.2 per cent in 2006. Looking to 2007, advertising revenues could top €1.2bn.

The UK comes top of online ad revenue-generating countries with €302m, followed by France with €241m. The rest of the list sees Germany making €174m, Italy with €96m, Spain at €52m and the Netherlands with just €21m – and it's a sequence that won't change in the next four years according to PWC.

The study puts the healthy outlook mostly down to more people getting online, particularly signing up to broadband – which favours the development of new, value-added advertising formats, like video.

According to the consultants, the number of broadband users in 2003 will reach 15.9 million in total in the six countries in question, compared to 9.6 million last year. In 2007, the figure is predicted to hit as high as 43.3 million.

The study concludes that the rapid expansion of e-commerce transactions, particularly in France, Italy and the UK, will increasingly make the internet the appropriate medium for advertisers to have online operations.

Christophe Guillemin writes for ZDNet France