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London (pte019/05.04.2005/11:15) - Internet advertising expenditure is now four times larger than at the height of the dotcom boom, according to a new report. As the Media Guardian http://www.mediaguardian.co.uk reports, in 2004 Internet advertising expenditure rose 60 per cent year-on-year to reach 653.3 million pounds, a jump from 407.8 million pounds in 2003.The share of total advertising expenditure spent on pop-up adverts, paid listings on search engines and other forms of internet advertising was 3.9 per cent for the year, overtaking radio's share of 3.8 per cent for the first time, according to the report from PricewaterhouseCoopers, the World Advertising Research Centre and the Internet Advertising Bureau.
According to the IAB http://www.iab.net , the trade body for online advertising, the surge in spending was a "coming of age" for online business. As the Media Guardian reports, historically the medium has been criticised as ineffective in communicating advertising messages, particularly brand advertising used by companies to evoke an emotional connection with consumers. "The audiences were online but the advertisers weren't, but that's starting to change," said Mark Terry, a spokesman for IAB. According to the trade body, sophisticated technology meant that more engaging pop-up adverts appeared online, some using rich media, sophisticated graphics and moving images to hook in consumers to microsites. Although half of Britain still does not use the Internet, a strong take-up of broadband services among those that do, as well as cheaper computers, led to the increased advertising expenditure. BT will connect its five millionth broadband customer this week, one year earlier than forecast, it was announced yesterday. (newsfox reports: http://www.newsfox.com/pte.mc?pte=050404037)
"There's a massive cultural shift going on forcing a change in consumer and advertiser behaviour," said Guy Phillipson, the IAB chief executive. "The triple crown of cheap broadband, cheaper technology and ever more compelling content is driving consumers to the Internet and pulling advertisers online," he said. "The audiences are there - more marketers need to wake up to the brand building and direct sale benefits of the Internet as a maturing medium."
Last year, radio had a 3.8 per cent share of revenue; cinema 0.9 per cent; outdoor 5 per cent; directories 6.4 per cent; direct mail 14.6 per cent; television 23.9 per cent, and press 41.5 per cent. Total expenditure rose by 5.8 per cent to 16.9 billion pounds in 2004. According to the IAB, online is significantly ahead of its target of overtaking the market size of outdoor by November 2007. The research was based on recorded revenues reported to PwC by the finance departments of online media owners. Thousands of websites took part in the research.
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