Interactive advertising share to double over four years

Internet advertising continues on its strong upswing as the global economy stalls, according to a new report by Group M. Interactive media’s share of worldwide advertising expenditures is expected to hit 15% in 2009, almost double from four years ago, and will remain the main source of growth as ad spending in traditional media continues to decline.

Ad spending in interactive media – Internet, mobile and gaming – reached 11% in 2007, driven mainly by gains recorded in the US and Western Europe, as well as by the increased use and availability of improved handsets, inexpensive laptops, faster broadband, and extensive Wi-Fi connections.

The survey covers 35 countries and shows digital advertising’s share of total ad investment rising from 8 percent in 2005 to 15 percent in 2009.

Among other key findings of the report:

  • Almost 45% of interactive ad spending is for display ads, a figure that is expected to fall slightly. Paid search advertising accounted for 38% and is expected to grow
  • Google commanded a median 86% share of 2007 search inquiries in the survey’s sample of 35 countries
  • 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
  • There is also strong positive correlation between the amount of broadband a country has and the internet’s share of advertising investment
  • Demographics alone will sustain growth in internet use among consumers for at least another generation, and possibly two, as those under 25 years old carry their habits into middle age and beyond
  • The amount of time consumers spend online is increasing from a mean of 27 minutes daily in 2005 to a projected 46 minutes next year
  • 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  
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