Online advertising growth will slow
UK spending on online advertising will slow this year with display ads the worst hit, according to a new study.
UK spending on online advertising will slow this year with display ads the worst hit, according to a new study. Spending on online advertising is likely to slow this year due to the credit crunch, according to a new report.
The growth in online ads will drop to around 20 per cent, a fall of 18 percentage points on 2007’s growth of 38 per cent, says new research by PricewaterhouseCoopers.
Most vulnerable to the slowdown is display advertising, due to its “focus on brand advertising and limited measureability.”
The report suggests there will be a trend towards performance-based advertising in the future, which will put more pressure on companies to cut back on display.
Search remains the most popular form of online advertising, with PricewaterhouseCoopers predicting a growth of around 30 per cent in this sector in 2008.
“The search segment benefits from its ability to demonstrate clear return on investment, which will be an increasingly important feature in a downturn, and therefore we expect to see growth above the online market average,” the study said.
While the economic downturn will produce a drop in growth, PricewaterhouseCoopers said they remained confident that “double digit” growth would be experienced by both forms of advertising.
Living Streams comment: Firms which don’t cut back on promotion in times of downturn do best when the receovery occurs. With pay per click advertising, although lower number of searches results in lower numbers of website visits, it results in proportionately lower spending with the search engines.
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