Online advert business up 20% last year

ONLINE ADVERTISING grew 20 per cent last year to €132 million despite a recession in the overall ad market, a study by IAB Ireland and PricewaterhouseCoopers shows.

A surge in advertising by companies on social-media sites helped display advertising to become the fastest-growing segment of the online market.

Display now accounts for 38 per cent of the online market with an estimated spend of €47.8 million, with social-media advertising accounting for €5.8 million of that figure. Telecoms providers, fast-moving consumer goods companies and entertainment and media firms were the top spenders.

Search advertising remains the biggest online format, accounting for 42 per cent of the market, while classified ads, the value of which was flat in 2011, make up the rest with a 20 per cent share.

IAB Ireland, the trade association for the Irish online advertising industry, forecasts that online adspend will break the €150 million barrier in 2012 and account for more than 20 per cent of the total advertising market.

Online is now the third-biggest sector, with only the television and newspaper industries capturing more advertising spend. The overall ad market declined 4 per cent in 2011 to €897 million, research firm Nielsen estimates.

Seven in 10 participants in the IAB/PwC study anticipate “growth” or “strong growth” in the online market in 2012.

Ireland’s online ad market still disproportionately lags that of the UK, where companies spent almost £5 billion (€6 billion) last year – almost 38 times the value of Irish online adspend.

The market may already be bigger than the IAB/PwC figures suggest. RTÉ and one other ad publisher did not provide data for the second half of 2011, so their revenue for that period was estimated using first-half data, with no growth assumed.

Estimates rather than publisher data were also used for Google and Facebook, which do not break out their earnings from Irish advertisers.

In a separate survey of 1,500 consumers by the Association of Online Publishers (AOP) Ireland and Amárach Research, almost a third said they had searched for a brand prompted by advertising on Irish media sites.

“Trying to understand the relationship between consumers and online advertising is complicated as, although they may visit certain sites frequently and spend considerable time on them, they may not actually notice the advertising,” said AOP Ireland chairman Julian Douglas.