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Euro Online Ad Market Smoking Hot

The Internet is the place to be, where ever you are. But if you happen to be in Europe, then the Web really is a great place to advertise.

The Interactive Advertising Bureau Europe (IAB Europe) released the findings of its annual advertising expenditure survey for 2007. Considered to be THE guide to the size and value of the European online advertising industry, its results showed that online advertising continues to grow, grow, grow, with “an average growth rate of 40% year-on-year.”

How much Growth?

Just how much is forty-percent growth? Well, in 2007 the European online advertising market was worth approximately €11.2 billion, up four billion euros in 2006. Such growth is also closing the gap within the US market, which grew 26% to a market value of €14.5 billion in the same period.

You are Advertising Where?

Advertising growth isn’t just confined to the usual places. Two thirds (approximately 65%) of European online ad budgets were spent in the big three markets of the UK, Germany and France. However in some of the smaller markets, the report showed very high growth rates — Greece (91%), Spain (55%), and Slovenia (49%).

Spend Per User

Among the metrics used by the IAB is a measure they created called ‘Spend per user’, which is used to “illustrate the value of one Internet user to an advertiser in the different markets”. A very handy calculation indeed, as it shows what an advertiser spends per person within a given market.

For instance, European advertisers spend an average of €80.6 per person, while Norwegian advertisers spent the most at €133.2 per person, followed by the UK at €120.8 and Denmark at €109.5 in 2007. In the US, advertisers spent €91.9 per person. The theory is that the more mature the market, the higher the value placed on the Internet user by the advertisers.

One of the goals of the IAB is to achieve “10 before 10”. That is, 10 European countries where online advertising accounts for at least 10% of overall ad spend by the year 2010. Remarkably, by the end of 2007, Denmark, Germany, Netherlands, Norway, Poland, Sweden and the UK had all reached this benchmark.

Who’s doing the spending?

For the first time, the IAB included data about what sectors invested the most in online advertising in 2007. Not surprisingly the front runners included entertainment and leisure, telecoms, finance and insurance. In particular, the IAB notes that “advertisers from the entertainment and leisure sector, which spends the most money at present, have taken advantage of the interactive and social media formats on the web to promote their products and services”.

While traditional media advertising has been slowing, the stability of the Web is definitely proving itself. Time will tell if this is a trend that will continue to grow upward and onward. Until then there are billions of advertising dollars and Euros being spent to capture the dollars of online users.