After years of being viewed as laggards in online advertising, the countries of Europe are catching up — and fast.

"eMarketer estimates online ad spending will hit $7.5 billion in Western Europe this year, up 25% from $6.0 billion in 2006," says Lisa Phillips, eMarketer senior analyst and the author of the new Europe Online Advertising: Spend, Trend and Audience report. "It is literally gobbling up ad dollars from other media."

This year, the Internet will comprise 7.3% of total European ad spending — ahead of radio and out-of-home — but by 2010 it will account for 9.4% of all ad spending, at the expense of newspapers (28.1%) and magazines (15.8%). TV’s share of the market will grow slightly, to reach 34.4% in 2010.

More than half (51%) of the growth in online ad spending in Europe has come at the expense of other media, according to the "Marketers Internet Ad Barometer" report, published by the European Interactive Advertising Association (EIAA).

"Europe as a region is far from homogeneous, and advertising strategies must employ both national and pan-European elements," says Ms. Phillips. "The vast majority of online ad budgets are allocated by country, but regional and pan-European teams of marketers have strong influence."

There are definitely challenges ahead.

Nevertheless, marketers surveyed by the EIAA, representing global and European brands, expect the online spend to grow 67% between 2006 and 2008.

In the UK the Internet is expected to account for as much as 18% of all media spending this year, according to GroupM.

The UK is also the most expensive country in the world for online advertisers. eMarketer estimates that advertisers will spend $217 per Internet user in the UK in 2010, compared with $136 per French user and only $10 per Italian user.

By comparison, the US audience seems a bargain. Advertisers spent $86 per American user in 2006, and they are projected to spend only $130 per user in 2010.

"And don’t forget Central and Eastern Europe," says Ms. Phillips. "As of right now, it is the fastest-growing region for advertising in Europe."

Even though its ad spend equaled just 27% of the ad market in Western Europe in 2006, ZenithOptimedia predicts the region will grow to a total of $13.8 billion by 2009, overtaking Western Europe, which will account for $12.9 billion.

Online advertising is keeping pace in Eastern Europe as well. Internet advertising in the region will grow 28.6% this year, to $292 million, based on PricewaterhouseCoopers/Wilkofsky Gruen Associates data, and hit $482 million in 2010. That year, Poland will account for 44.8% of Internet spending in the region, or $216 million, followed by Russia with a 32.4% share, or $156 million.


Via eMarketer