Online advertising puts more pressure on print media

The USA set a record on the level of profit received from online advertising. According to Interactive Advertising Bureau (IAB) and PwC, the income of the sector received during the first six months of 2010 increased by 11.3 percent to $12.1 billion. Contextual advertising is the leader, but video advertising shows positive dynamics as well. The Internet continues to put pressure on traditional media outlets.

The profit from video advertising on the net increased by 31 percent in comparison with the first half year of 2009. Banner advertising returned the profit of over $4.4 billion, which marked an increase of nearly 16 percent in comparison with 2009. The largest share still belongs to contextual advertising - 47 percent.

The report shows that marketing experts continue to target interactive media to promote their brands. This trend is going to continue in the future.

A forecast from Borrell Associates said that the total increase of spending on advertising would not exceed five percent in 2011 and make up $238.6 billion. Online advertising will grow by 14 percent - to $51.9 billion. The spending on targeted banner advertising in the States will grow by 60 percent in 2011 - to $10.9 billion, experts believe.

Many Russians see no difference between such notions as 'Internet' and 'social networking'. A research conducted by comScore showed that 34.5 million Russian Internet users visited at least one social network in August of the current year. A Russian online surfer spends the average of 9.8 hours on social networks, which doubles the similar index for the rest of the world - 4.5 hours per one user a month.

In Russia, the Internet wins more and more space on the market of advertising. According to the Association of Communication Agencies of Russia, advertisers spent 7.3 billion rubles on online advertising in the third quarter of 2010. A little more was spent on outdoor (8.1 billion rubles) and print media advertising (7.8 billion rubles).

Dmitry Ashmanov, the director of Mindshare Interaction:

"Most likely, online advertising will leave print advertising behind already by the end of 2011. Television is still the leader, but its influence on the market will begin to decline soon as well, I believe. The advertising market grows by 12-14 percent, whereas the Internet grows by 25-30 percent, including both contextual and media advertising. The market of online advertising has been developing very fast in the USA. The situation in Russia is the same, although Russian indexes are a bit lower. The development of the market of online advertising did not stop during the crisis," the specialist said.
The advertising market in Russia will increase by 16 percent in 2010 as opposed to 2009. The share of the Internet will grow by 35 percent. In 2013, Russian advertisers will spend more on online, rather than outdoor advertising.

"If we make a diagram of all mass media, the share of online advertising will make up ten percent. This is already an impressive amount of money in comparison with 2009, when the share was eight percent. In America, the growth is larger, around 15-20 percent. In general, I would say that the advertising market in Russia has been developing fast enough," Alexander Kim of GroupM Interaction told Pravda.Ru.

Some experts believe that the Internet will become the second largest segment after television on the Russian market of advertising already by the end of the current year. Others say that it can happen during the second quarter of 2011.

Vladimir Shabanov
Pravda.Ru

Read the original in Russian