Display ad dip dents online ad growth

The downturn took its toll on the European online advertising market last year as growth plummeted to just 4.5%, down from 20% in 2008, fuelled by a fall in digital display revenue in markets such as the UK and France. A report from the Interactive Advertising Bureau Europe has found that the European online ad market was worth €14.7bn (£10bn) last year. The report, compiled by analysts Screen Digest, reflected previous findings in the UK that Google-dominated search advertising remained relatively resilient while marketers pulled budget from online display advertising. Search advertising grew by 10.6% year on year, an impressive performance given the steep declines recorded in other media, but well down on the 26% growth seen in 2008. Display advertising was flat year on year across Europe, but most of the more mature, larger ad markets experienced a decline. The UK was down by close to 5% year on year, France was down 6% and Sweden was down 5%. "Search outperformed display last year because advertisers focused on return on investment through direct response formats at the expense of brand advertising in the recession," said Vincent Létang, senior analyst at Screen Digest. "In addition, some advertisers felt online brand advertising was not yet delivering the enhanced measurement standards that they needed in order to justify further increases in their investment in digital." However, Letang added that digital display advertising started to recover in the first quarterof this year. Internet advertising accounts for close to 20% of all ad spend in Europe, according to the report, which includes countries such as Russia, Switzerland and Slovakia for the first time. Five markets – the UK, France, Germany, Spain and Italy – account for 70% of online ad spend across Europe. The UK recorded growth of 4.6%, France 1.7%, Germany 5%, Spain 7.1% and Italy 6.4%. Only four of the 23 markets measured posted double-digit growth last year, achieved because spend was starting at such a low level – Poland, Turkey, Austria and Greece. "We are at a crossroads for the online advertising market," said the IAB Europe chief executive, Alain Heureux. "On the one hand we have a booming search market supporting traffic and sales and lead generation, and online display is ripe for further growth due in part to the success of video and social media. New techniques and business models provide the perfect platform for a new phase of online display growth." • To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. • If you are writing a comment for publication, please mark clearly "for publication".