Online advertising market
Each year, online advertising sets new records globally with double-digit growth rates. Indeed global internet advertising will grow about 33 per cent between 2011 and 2013, reaching an outstanding value of $96.4 billion predicts ZenithOptimedia1. This figure is set to increase further as Magna Global2 expects global online ad spend to reach$129 billion by 2016. Phorm is an example of how technological innovation will drive the benefits of creative online advertising and marketing in the future.
Growth rates will exceed all other advertising mediums in 2011 as the accountability, efficiency and flexibility provided by internet advertising continues to increase. Traditional media’s share of the ad market will decrease, with newspapers one of the main victims; Magna Global predicts that online advertising will overtake newspapers as the second largest advertising medium by 2012.
Online advertising has been built around two key propositions – search and display. Both forms have seen significant growth over the past five years with search dominating the market achieving a global share of 481 per cent. Display, with a share of 351 per cent has previously lacked search’s targeting capabilities and scale.
| Search | Display |
| Text Based, static | Graphical, motion, video |
| Granular targeting, qualified audiences | Limited targeting to date, likelihood that all ads will be targeted in the future |
| Large scale | Large scale, fragmented |
| Ease of use | Requires creative |
| Dynamic bid model | Variety of purchasing methods |
The increase in budgets being spent on online advertising can be partly attributed to marketers being made ever more aware of the increasing popularity of personalised advertising. Research by Q Interactive3 finds that almost two thirds (65 per cent) of women in the US said they were happy to receive an online ad that was directly targeted at them.
Similarly, about 55 per cent of US consumers said they preferred free content along with targeted advertising rather than paying for content, reveals a survey by Preference Central4.
As you'd expect from such a dynamic sector, innovation has driven development. Phorm's new personalised internet approach is likely to push online advertising tools, services and networks much further, through systematic industry research on behavioural trends and formats worldwide.
The simple concept behind this approach - which is underpinned by complex technology – is to deliver adverts and content from across the web to users based on their interests. Greater relevance translates into better performance and return on investment for advertisers.
Sources:
1. ZenithOptimedia, October 2011
2. Magna Global, October 2011
3. Q Interactive, April 2010
4. Preference Central, July 2010
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