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Last Updated: Wednesday, 22 October, 2003, 10:53 GMT 11:53 UK
Online advertising 'to click again'

Online advertising is finally about to climb out of its three-year slump, according to a report by accountants PriceWaterhouseCoopers (PWC).

The report says that internet advertising in Western Europe will see double-digit growth this year, thanks mainly to paid-for-listings placed through search engines and the overall growth in internet use.

High-profile sporting events such as the Athens Olympics in 2004 and the football World Cup in Germany in 2006 should sustain the upturn over the next four years, PWC predicts.

Online advertising went into meltdown after the dotcom bubble burst in 2000.

But this year should see growth of 10.6% in online advertising in the UK, France, Italy, Germany, Spain and Holland, taking income in the six countries to 886m euros ($1.03bn, 617m).

As broadband develops it will offer different types of online advertising that are not available at present
Paul Pilkington, PriceWaterhouseCoopers

According to Paul Pilkington, senior manager at PWC, it is the use by the internet's big search engines of search-result placement fees which is making the difference.

The leading company running this type of advertising is Overture, which auctions to the highest bidder the top position on searches for given words or phrases.

The company has now been bought by search giant Yahoo, whose shares have risen to a 33-month high on the back of improved US online advertising revenues.

Mr Pilkington said: "This has been a huge growth sector, paying for your keywords to appear highest in a search engine listing.

"This has really taken off, with companies paying for their name to be placed in a premium position for search engine results."

Television-style ads

He also said an increase in internet users was helping to boost advertising.

By 2007, advertisers will spend more than 1.25bn euros in Web advertising across the Western Europe region, the PWC study says.

It believes strong demand for high-speed internet broadband services will boost the market for online access and internet advertising spending to 18.1bn euros, a 7.4 % gain over the 2003-2007 period.

The spread of broadband will enable advertisers to move towards more TV-style advertising, Mr Pilkington said.

Although a growth in advertising usually indicates better economic times, Mr Pilkington warned the upturn in online advertising could not be used as a gauge of the mainstream advertising market, or wider European economy.


SEE ALSO:
Why online ads do not work
11 Jul 03  |  Technology
Ad slump continues, says AOL
03 Dec 02  |  Business
Yahoo returns to winning ways
09 Oct 02  |  Business
How to make web ads work
14 Aug 02  |  Technology


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