Euro online ad spending to double by 2012

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BRUSSELS -- The value of online marketing in Europe will reach €16 billion ($22 billion) by 2012, more than double the 2006 figure, according to a study released Thursday.

The study, by research body Forrester, said that online ads will surge to 18% of market share within five years, up from the present 9%, as the number of European consumers with broadband access rises to 83 million from 47 million.

"After five years of dipping their toes into the online marketing waters, firms have come to realize that the net is a valuable medium for client acquisition, retention and market expansion," the report said.

It said that 52% of people were now regularly online, spending more time doing so than watching television. European Internet users now spend 14.3 hours a week online, compared with 11.3 hours watching TV and 4.4 hours reading newspapers or magazines, the research group said. As a result, the report found that 36% of Europeans now watch less television because they go online.

At the same time, online consumers do not seem averse to the kind of targeted advertising that the online channel can deliver: 34% of online consumers say they do not mind ads if they relate to their interests; 40% trust price-comparison sites; and 36% trust online product reviews from other users.

The report -- based on interviews with 22,000 consumers -- said search engines will continue to dominate online advertising spending, followed by display advertisements and e-mails. The U.K. would continue to see the most online advertising in the next four years, ahead of Germany and France.

The online market was valued at €7.5 billion ($10.3 billion) in 2006, but the report predicts that display advertising alone will grow from €2.5 billion ($3.4 billion) last year to €5.6 billion by 2012.

"Over the next few years, the shift of online marketing from experiment to mainstream will force marketing organizations and processes to change," Forrester analyst Rebecca Jennings said.

She said that, as different types of social media such as MySpace and peer reviews strengthen their grip on users, marketers will jump on the bandwagon by switching ad spending to social media forms like RSS, blogs and networks.
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