According to the "European Online Advertising Forecast, 2006 to 2011," released by JupiterResearch, search engine marketing expenditures in Europe are rising, and for the best of all possible reasons — Europeans are buying more online.
Internet Retailer estimates that as the Internet becomes mainstream in Europe over the next several years, by 2011 European marketers will spend Eur83 billion on online advertising, representing 8.3% of all European advertising spending.
Search engine marketing (SEM) will account for the largest part of that growth, increasing from 41% of total online ad spending in 2005 to a projected 49% in 2011.
In fact, already last year, in order to reach the increasing number of European online shoppers, 65% of the search marketers Jupiter surveyed said they had upped their paid search spending.
In addition, new advertisers are coming online — following the consumers. As Jupiter analysts wrote, "Internet penetration grew from 46% in 2004 to 49% in 2005, and will reach 58% in 2011."
"This increased use has resulted in a growing recognition across all industry sectors of the importance of incorporating online media into the marketing mix," the report concluded.
The move to online buying has definitely begun. This year, according to eMarketer estimates, Web retailers in Western Europe will sell $97 billion worth of products and services (including online travel, event tickets and digital downloads).
As far as exactly where the growth is likely to take place, although the UK has traditionally been the continent’s e-commerce leader, a shift may be under way.
The most recent "eCommerce Forecast" from Forrester Research reports that online sales are now growing fastest in Italy and Spain. From 2006 to 2011, Forrester expects retail e-commerce sales in Italy and Spain to grow at annual rates of 31% and 27%, respectively. That compares to only a 12% annual growth forecast for the UK during that period.