U.K. Advertisers to Increase Web Spending

Despite the widespread retraction in spending by major advertisers, some signs are beginning to suggest that the situation might be improving, with a survey of major U.K. advertisers finding that most have renewed or increased their online budgets for next year.

The survey, conducted jointly by two ad industry groups, the Incorporated Society of British Advertisers and the Advertising Research Consortium, found that 60 percent of the U.K.’s major advertisers have already advertised at least once on the Web.

About 50 percent say they plan to increase their spending in 2002, while only 12 percent of those companies polled said they would reduce their online ad spending.

“Despite the burst of the Internet bubble, the situation amongst leading advertisers appears robust,” said Jonathan Lace, the study’s author. “Spending on Web site development, e-commerce and Internet advertising will continue.”

Yet in spite of increasing budgets, questions linger about whether companies actually will use online advertising effectively. Many industry leaders maintain that the Web is best used when integrated into companies’ overall ad and marketing efforts, but close to 50 percent of those advertisers surveyed by the ISBA/ARC said they rarely integrate online and offline campaigns.

Still, there is hope, as advertisers become accustomed to cross-channel promotions: the study found that 60 percent of companies have used direct mail and public relations to promote Web initiatives.

Additionally, funding for e-commerce and Web site design projects are increasingly coming from companies’ marketing budgets, rather than their technology budgets — which could mean that marketing departments will exercise greater integration of online media into their companies’ overall advertising mix.

Nearly 75 percent of companies had marketing executives in charge of the main Web site, with funding coming entirely from marketing budgets in 42 percent of those polled. Only 33 percent of companies funded their online ventures chiefly from other sources.

“The greatest surprise is that new media remains very firmly within the remit of marketing departments — even when projects involve e-commerce or other heavily technical activities,” said Debbie Morrison, director of membership services at the ISBA. “New media is seen as a standard marcomms tool, funded and managed by the marketing department. Given this, it is striking that almost half of advertisers surveyed believe that they are still failing successfully to integrate on- and off-line media.”

The study comes following a handful of optimistic predictions about the online advertising industry’s fortunes over the next several years. In July, research groups pointed to growth in the U.K. and Asian ad markets during 2002, while industry analyst Jack Myers predicted expansion in the U.S. market during the next year — unlike most traditional media, including network television.

Still, the figures from the ISBA and ARC — as some of the first numbers based on actual budgets being allocated for next year — represent the first hard evidence of a turnaround in online advertising, and traditional marketers’ increased confidence in the industry.

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