European Online Ad Spend to Grow 70 Percent in 2001

[London, ENGLAND] It may have fallen slightly in December 2000, but, according to research company Forrester, the total online advertising spend in Europe will leap by 70 percent this year.

However, before anyone gets too excited, Forrester warns that the first half of 2001 will be “relatively quiet,” with spending expected to accelerate only in the later months.

By the end of 2001, the advertising spend will have increased from its current EUR 690 million (US $650 million) to reach EUR 1.2 billion (US $1.13 billion).

Forrester’s European AdWatch Manager Marc Cohen explained the increase by saying that traditional advertisers will step further into the market, even though dot-coms are tightening their belts.

“In general there is this virtuous circle going on. More people are going online, more people are getting comfortable with spending money online and more companies are getting money via online channels, so they can spend more on online marketing,” said Cohen.

Industry observers have been saying for some time that the collapse of the dot-com bubble was the result of over-eager investment rather than any underlying problem with the Internet phenomenon itself. Even after several years of the Web, developers and marketers alike are still learning the business — and those companies that remain in the game will reap the rewards.

Online ad spending dipped in both the U.K. and Germany at the end of last year. It fell in the U.K. to EUR 17.3 million (US $16.3 million), from EUR 17.7 million (US $16.5 million) in November, while in Germany it also fell to EUR 12.6 million (US $11.86 million) from EUR 12.8 million (US $12.06 million) the previous month.

France bucked the trend, with spending on Internet advertising going up to EUR 8.6 million (US $8.1 million), from EUR 8.3 million (US $7.89 million) in November. Forrester notes that France is a less mature Internet market than the other two countries where spending fell.

Forrester’s Internet AdWatch tracks the online activities of more than 15,000 advertisers across 650 sites in France, Germany, and the U.K. Its figures give a unique insight into the buoyancy of the industry, analysed by category.

The top spending category was consumer goods, making up 25 percent of the total spend in the U.K. and 24 percent in Germany.

Top spenders were online gift shop TooJoo in Germany, spending EUR 0.38 million (US $0.36 million) and Virgin Group in the U.K., spending EUR 0.49 million (US $0.46 million).

Internet AdWatch sends its customers weekly email Campaign Alerts with hotlinks to their placements. The archive now contains 6 million observations of online advertising.