European Internet Advertising Expected to Rebound in 2001

Even though spending on online advertising fell slightly in key European markets in December 2000 from the previous month, Forrester Research predicts a 74 percent increase in European spending on online advertising in 2001.

After a likely slow start, Forrester expects online ad spending to reach 1.2 billion Euros in 2001, up from 690 million Euros in 2000.

“The first half of 2001 will be relatively quiet, but by the second half, growth in spending on online advertising will pick up,” said Marc Cohen, Forrester’s European AdWatch Manager. “Although dot-coms are tightening their belts, traditional advertisers are expected to step further into the market. 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.”

According to Forrester’s Internet AdWatch Spending Monitor, in December of 2000 online advertising spending across all of Europe’s major markets totaled 38.8 million Euros. Spending on online advertising in the UK fell to 17.3 million Euros from 17.7 million Euros in November, while in Germany, spending fell to 12.6 million Euros from 12.8 million Euros the previous month. In France, a less mature market for Internet advertising, spending rose slightly to 8.6 million Euros, up from 8.3 million Euros in November.

The consumer-goods category saw the most spending on online advertising in December, rising to 25 percent of the total spent in the UK and 24 percent in Germany. In Germany, TooJoo, an online gift shop, spent the most money on online advertising at 381,000 Euros. In Britain, Virgin Group led with 349,000 Euros, and in France, Banque Nationale de Paris was the biggest spender, with at 194,000 Euros. Banque Nationale de Paris maintained its rank after spending the most on online advertising the previous month, while in the UK, the Royal Bank of Scotland Group had been in first place in November, and Germany’s top spender was Primus Software.

“In contrast to the lower overall online adverting spending, November and December 2000 showed increases in the number of companies advertising, but they were getting lower rates for each ad purchased,” Cohen said. “Also, many new advertisers were spending small amounts as they were making first-time forays onto the Internet over Christmas. Traditionally, spending by media and entertainment companies has been the biggest category, particularly over the summer months. Banks and information technology companies were prominent among the biggest spenders in online advertising, while more retailers were online targeting Christmas shoppers.”

Forrester’s Internet AdWatch tracks and values the online activities of more than 15,000 advertisers across more than 650 sites in France, Germany, and the UK.

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