The Strategist

Internet ads are triumphing over TV promo in Europe

07/05/2016 - 15:27

Last year was the in the history when European advertisers spent on the Internet promotion more than on TV advertising, according to a report of IAB market research firm, prepared in cooperation with IHS Advertising Media Intelligence Service and comScore. Spending on the Internet advertising grew over the year by 13% to 36.4 billion euros, while TV promo has remained approximately at the same level - 33.3 billion euros.

Display advertising is the fastest growing segment of online advertising in Europe. In 2015, its cost rose by 17.2% to EUR 13.9 billion. Yet, contextual advertising remains the biggest as its sales showed jump by 12.5% to 17 billion euros. Market of advertisements in Europe as a whole grew by 4.9% to € 5.3 billion. At the same time, the study’s authors write that in some countries, this segment has become the fastest growing.

The researchers studied 27 markets. The United Kingdom is in the first place (EUR 11.8 billion), where online advertising segment has exceeded advertising on TV a few years ago; Germany occupies the second position (EUR 5.8 billion), and France is the third (4.2 billion euros). 

The UK and Ireland were the most active on the mobile advertising markets. There, mobile ads take up about half of entire spending on online advertising. Overall, a quarter of media advertising in Europe (25.4%) was placed on mobile devices. In 2015, various brands spend on it EUR 3.5 billion, which is 60% more than in 2014-th. Online video advertising is also growing steadily, and already holds 16.7% of the media segment.

Ireland is also a leader in growth of the advertising market - it amounted to 29% in 2015. Bulgaria and Poland are showing high rates as well (+22.3% and 21.8%, respectively). 

Such a jump in popularity of the Internet advertising is obliged to increasing number of various advertising spaces and formats. They constantly improvement and updated, which encourages advertisers to talk directly to the target audience, explains Anne Goodman, Deputy Chairman of IAB Europe’s Board of Directors. Contextual advertising allows a marketing campaign to become more effective and transparent, she adds.

Internet advertising has gone from being a minor media channel to indispensable means to reach and engage consumers, says the report’s co-author, Director of Advertising Research at IHS Technology Daniel Knapp. The challenging economic environment and the stagnating media market make the Internet advertising looks like a guiding star. It keeps it afloat and does not allow to fall, said Eleni Marouli, another co-author.

The increase in online advertising spending is a global trend. In the US, sales of Internet advertising surpassed the advertising market on terrestrial TV back in 2013 with $ 42.8 billion and $ 40.1 billion respectively. However, if we take into account cable TV advertising ($ 34.4 billion in 2013), then it occurs that American advertisers still prefer TV promotion.