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European Online Ad Spending to Rise for 2003

After a two-year slump, online advertising in the six largest European markets is set to grow again this year, according to a forecast released yesterday by PricewaterhouseCoopers.

The accounting firm expects online advertising in the United Kingdom, France, Germany, Italy, Spain and the Netherlands to total 886 million euros ($1.04 billion) this year, a 10.6 percent annual increase. This is the first uptick for European online ad spending after declines in 2001 and 2002. PwC sees the strongest growth this year in Germany (16 percent) and the UK (15.7 percent).

The brisk pace is forecast to continue for the next few years, with double-digit spending increases in 2004 and 2005. PwC said Internet ad spending for the six countries is set to rise to nearly 1.3 billion euros ($1.5 billion) by 2007.

PwC cited traditional advertisers embracing the medium, the development of new ad formats and the spread of broadband as factors driving the growth.

The firm expects broadband penetration in the six countries will grow from 15.9 million subscribers at the end of this year to 43.3 million in 2007, a compound annual growth rate of 35 percent. By then, PwC forecasts Internet penetration in the Western European countries will surpass 50 percent.

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