The total online advertising market in Ireland is estimated to be worth €41 million this year and is expected to grow to €52 million next year, according to an industry expert.

In the absence of any audited figures on internet advertising locally, Guy Phillipson, chief executive of the UK-based Internet Advertising Bureau (IAB), produced the figures based on his own knowledge of the market and research with owners of large Irish websites.

Speaking at the "Building Relationships Online" conference in Dublin yesterday, Phillipson said that in contrast to the UK, classified advertising is the most dominant format and would be worth €21 million this year. In the UK, paid-search has 57.9 per cent of the market but in Ireland it accounts for just 14 per cent of the market (€6 million), lagging even online display advertising, which has a 34 per cent market share (€14 million).

Online accounts for just 3 per cent of the total Irish media spend, in contrast to the UK where IAB figures put it at £2 billion (€2.97 billion). Phillipson said the market grew exponentially in the UK when advertisers realised that internet usage was accounting for 25 per cent of total media consumption.

Michael Dwyer, managing director of Empathy Marketing, the company that organised the conference, called for an industry move to start measuring internet usage in Ireland. "It's time the industry organised itself a bit better around third-party validated measurement of audience figures in particular," he said. "There's a big need for it and it has to be sorted out quickly."

Mr Dwyer, whose firm also operates the Pigsback.com consumer incentives site in Ireland and the UK, said he expected online to have 10 per cent of advertising spend in the next three to five years.

Jay Stevens, vice president for sales and operations with MySpace.com, is building the social networking site in Europe from a London base. He said MySpace now planned significant investments in English-speaking European markets such as Ireland.