Undoubtedly the online advertising market has undergone great changes in recent years and its evolution and growth remain a constant above all, demonstrating its stability and maturity at a time when the effects of the crisis and the economic recession have hit hard at advertising sector.
However, online advertising has shown that it continues to enjoy very good health with excellent forecasts for the future.
To know in depth the current situation and the prospects of the online advertising market, we have consulted the opinion of different CEOS and prominent professionals of the most representative companies in this market with a presence in our country.
We consider that the current situation of advertising in general responds to the reality of the deep economic crisis. During the hard year 2009 all the media showed negative growth data, except for online and mobile. This trend reflects that the new media have consolidated as an alternative and that, gradually, they capture a greater part of advertising and marketing budgets. The year 2009, according to figures from the IAB, resulted in a growth of 4.9% compared to an 11% drop in the rest of the media (Infoadex data). This is a net positive result for the online media, but not exempt from less optimistic news: falling prices, budget reductions and the closure of numerous purely digital advertising media.
The first semester of 2010 has meant a moderate improvement of the situation for most of the media and for the online. In the first six months we have seen a greater dynamism in the market and a reactivation of advertising investment. The marketing of results or direct response has been one of the clear beneficiaries: advertisers increasingly direct a greater part of their budget to actions where the cost is directly related to business results, such as search engine advertising and affiliation. There has also been more activity in branding actions, with slightly higher budgets than in the previous year, although prices continue to suffer a downward trend. These perceptions are reflected in the June data of Zenith Vigia,
From our perspective, particularly a specialist in results marketing, the development of certain sectors is noteworthy, particularly the reactivation of the finance sector, the growth in telecommunications and the constant launching of new advertisers in the sectors of “retail”, consumer goods and fashion. The travel and tourism sector, despite being one of the most punished by the recession, has maintained its positive results in the online medium.
The second semester is full of unknowns because the persistence of the economic crisis is a constant threat, especially for the size of advertising budgets that are likely to moderate again, particularly during the third quarter. The price recovery will also be unlikely. However, we are definitely optimistic about the overall growth of the online medium and we trust that 2010 will close with growth data well above the previous year.
Joshua Novick founder and president of Antevenio
The online advertising market is experiencing an exciting moment. Those of us who have been in the sector for many years – and I have been in business for 15 years – have spent a lot of time trusting and waiting for it to take off and today we can assure you that this has already happened: The Internet currently represents the third medium in advertising investment. And although it has not yet reached the levels it can reach, if we look towards other more mature markets such as Great Britain or the United States, the trend is positive.
In the last three years we have had growths above two digits, compared to the drops of conventional advertising. During the first quarter of 2010, the general trend seems to have reversed, with growth of 0.6% (according to Infoadex). But the news is even better for online advertising, as it experienced an increase of 18%.
The increasing penetration of the medium (almost 60% of the population has access to the internet), the large audiences that reach (only in our advertising network Rich & Reach we can reach in a month 15 million people) and the growing time that the people dedicate to surf the web, and that in some segments of the population has already exceeded television, are the sociological reasons that have attracted advertisers. If we add to this the difficult macroeconomic moment that we have gone through, which has encouraged marketing directors to demand return, measurement and maximum efficiency of their investments, the growth of the Internet makes all the sense.
However, the sector still has to travel: it still represents 12% of the market share, compared to the more than 40% that television still assumes. In more developed countries like Great Britain, online advertising is the first medium – above television – with a market share of 24%.
This panorama is causing interesting business movements: a dozen strong multinationals have arrived and in the world of the agencies we see vertical integrations both forward (creative agencies that mediate in the purchase of advertising space) and backwards (media agencies that offer creative services). In addition, many social media agencies, SEO and other highly specialized services -including communication agencies- have been expanding their range of services, including advertising, both in terms of creativity and purchase of media. In such a specialized and innovative environment as the Internet, the key to carving out a space is to have the trust of the clients.
Jérôme Massebeuf, CEO Tribal Fusion
According to data from 23 European countries prepared by Screen Digest, on behalf of the IAB Europe, the online advertising market has reached 14,700 million gross figures in Europe. In other words, the old continent is getting closer and closer to the United States, where the market reached 16,300 million.
Although 2009 has been difficult, the European market grew by 4.5%, compared to 20% in 2008 (and 40% in 2007).
A growth that varies greatly from one country to another: France (+ 1.7%), the Netherlands (+ 1.9%), the United Kingdom (+ 4.6%), Germany (+ 5.2%), Italy (+ 6.5%) and Spain (+ 7.7%) above the European average … these countries represent 76% of the European online advertising market.
The Digital is increasingly the backbone in the organization of media agencies as all conventional media are digitized … in the medium / long term, there is no doubt that all advertising will be fully digitized.
The current situation of the online advertising sector is dynamic, in constant change, and we hope that for the benefit of the sector. On the one hand, the barriers of specialties created within the advertising sector are collapsing with companies offering products or services that would be expected from other types of companies a year or two ago, since the client prefers to work with fewer suppliers, rather than with a company for each topic. On the other hand, the economic crisis is catalyzing the migration of offline advertising to the online world, and we hope that the Internet medium has its “mini boom” perhaps after the economic recovery. We see that marketing directors in other markets such as the British already concentrate most of their budgets on the Internet.
To talk about the future, I’m going to divide it into two periods, short-term and medium-long term. We believe that the future in the short term will be characterized by the democratization of the online video format in conjunction with rich media formats, with examples such as the recent collaboration with SPOTi, gaining greater importance as new metrics such as i-GRP to attract TV investment to the Internet. The television medium is saturated exceeding the more than 12 minutes of advertising per hour established by law. A second issue is that of technology to reach the audience more precisely with topics such as retargeting. Finally, you will also see traditional online advertising campaigns integrated into traditional websites with distribution of the same by users on social networks to say,
It is difficult to predict the medium-long future, but we believe that the players in the sector will increasingly seek platforms that reduce the inefficiencies to unify the processes of buying and selling online advertising. For this, these platforms must include some of the trends mentioned above in the short term.
César Núñez, General Director Addoor
Online advertising is gaining market share over other advertising media. That there are dozens of online advertising companies with more than 20 employees is a great and unthinkable merit a few years ago. Online advertising is a source of employment, and it is a source of pride that many of the companies that generate this employment are, and generate their benefits for the country and not for foreign multinationals.
The prospects are good for consolidated companies and with inertia. Internet is already much more used than the press in those under 45 years, to which most of the advertising campaigns are destined. Facts like this continue to generate transfers of advertising investment from other media to the Internet: the headlines and chains that led the investment in their respective fields, “press” and “TV”, lose on the Internet the leadership at hand of native players such as Google and other networks that add hundreds of SME sites that, together, outperform even the largest headers. This generates opportunities for new companies, but those that have already been operating for 15 years through online advertising,