Forecast: European Online Advertising Doubles by 2008

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Online advertising in Europe will nearly double in the next five years as more homes get broadband connections and as measurement techniques improve, according to a new study.


Forrester Research expects European online advertising to grow at an annual rate of 12.5 percent the next five years, nearly doubling from $936.4 million (793 million euros) to $1.7 billion (1.4 billion euros). Forrester's forecast excludes high-growth areas like search marketing.


Yet Forrester does not see Internet advertising playing a significant role in media budgets. By 2008, the researcher expects online advertising to average 2 percent of overall advertising in European markets. It now accounts for 1 percent, Forrester estimated.


The largest markets in Europe -- the United Kingdom, France and Germany -- also dominate online advertising. Forrester expects the three to account for 65 percent of spending in the 17 countries included in the forecast.


Forrester cited the efforts by the Interactive Advertising Bureau to push standard ad formats as a key factor in driving growth. In addition, like in the United States, more traditional advertisers have caught on to Internet advertising's potential, helped by metrics that allow online to be compared more easily with other media.


Forrester's forecast echoes the sentiments of PricewaterhouseCoopers, which this month forecast double-digit growth in online ad spending in the six largest European markets through 2005.


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