Interactive advertising on a major upswing


Interactive media’s share of worldwide advertising expenditures—internet, mobile and gaming—is expected to hit 15% next year, almost double the amount recorded only four years ago, and will remain the principal source of advertising growth as ad spending in traditional media continues to decline, according to a new GroupM study.

The survey revealed that ad spending in interactive media reached 11% last year, sparked mostly by gains recorded in the U.S. and Western Europe, as well as by the increased use and availability of improved handsets, inexpensive laptops, faster broadband, and extensive WiFi connections.

In addition to spending forecasts, the survey also provides a detailed exploration of interactive media use in 35 countries, including a look at consumer time spent online compared with other media, e-commerce, top websites, and related interactive activities. The comprehensive report—dubbed Interaction: Addressable, Searchable, Social and Mobile—also quantifies ad investment in paid search, Internet display, mobile, e-mail, and gaming in rich detail.

The survey covered 35 countries and shows digital advertising’s share of total ad investment rising from 8% in 2005 to 15% in 2009.  It points out that Internet advertising has been the principal source of media investment growth in western nations since 2001 as spending in traditional media has leveled off.

“This report aims to improve advertisers’ success rate in digital marketing,” said Rob Norman, global CEO of GroupM Interaction.  “There’s little doubt that interactive channels are increasingly vital to delivering reach and engagement and will only become more so in the coming years.  This report sheds considerable light on how best to use these platforms and how marketers can get the most out of their investment in them.”

Among other salient details, the wide-ranging report revealed the following:

Demographics alone will sustain growth in Internet use among consumers for at least another generation, and possibly two, as under-25 year-olds carry their habits into middle age and beyond

Almost 45% of 2007 interactive ad spending counted as display, a figure that is expected to fall slightly. Paid search advertising clocked in at 38% and is expected to grow

Google commanded a median 86% share of 2007 search inquiries in the survey’s sample of 35 countries, somewhat ahead of other industry samples

There is a strong positive correlation between the amount of broadband a country has and the Internet’s share of advertising investment

The mean online shopping spend per user in 2007 was estimated at $471, and the only country to break the $1,000 mark was Denmark. The survey also revealed a particularly strong positive correlation between broadband penetration and annual online spend per individual.

Respondents also revealed that the amount of time consumers spent online was increasing, from a mean average of 27 minutes daily in 2005 to a projected 46 minutes next year.  The report concluded that the increased time was generally not a result of consumers spending less time with TV, radio and print but rather carving out more time to spend online each year, or possibly multitasking, which raises the bar for advertising creativity and engagement.