Online grows apapce, will double in Europe

Spending on online marketing in Europe will double in the next five years, from around $10.3 billion in 2006 to more than $22.1 billion in 2012, according to a new Forrester report.

In five years, online marketing – including e-mail, search and display advertising – will represent 18 percent of total media budgets. The forecast is based on data from Forrester’s Consumer Technographics surveys of more than 25,000 consumers in France, Germany, Italy, the Netherlands, Poland, Spain, Sweden, and the UK, and interviews with 24 major European marketers.

“Firms will raise their online budgets primarily to better reach the growing audience that relies on the Web for a widening range of decisions,” the report says. “After five years of dipping their toes into the online marketing waters, firms have come to realize that the Web is a valuable medium for client acquisition, retention and market expansion.”

The reason for this shift in spending is simple; audience and attention are moving online.

For example, 36 percent of online Europeans say that they watch less television because they’re online instead.

Another reason for the shift in spending is the growing a lack of trust on the consumers’ part. The survey showed that 67 percent of European online consumers believe that advertisers don’t tell the truth in ads.

Thirty-four percent of online consumers say ads that are related to their interests are not intrusive.

However, 40 percent of online consumers trust price-comparison sites, while 36 percent of online consumers trust online product reviews from other users.

In addition, Forrester interviewed 24 major European marketers to gain an insight into their online marketing strategies today and going forward.

“All of the interviewees use banner ads, with 17 using buttons and the same percentage using online sponsorships,” the report says. “More than half of them also use rich media ads. Interviewees cite a variety of drivers for online spend, with 10 wanting to grow their business and nine saying that they are simply following their consumers.”

Most respondents use paid search and 17 pay agency fees.

“They are in it for the long term – none said they would be spending less on search in five years time, and three in four expect to spend more,” the report says. “Why? A variety of reasons, including good return on investment , a need to follow the general trend, and a desire to do more targeted marketing.”

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