Online advertising rising but lack of broadband is posing a real threat
THE advertising market has taken a battering in the recession as companies cut back on discretionary expenses and "return on investment" becomes more important to potential advertisers.
Newspapers have been hit especially hard by the downturn in advertising but it seems reports of its demise have been greatly exaggerated.
On Tuesday, the parent of the 'Daily Mail' and 'Sunday Mail' said that advertising revenue had grown by 13pc -- including a 46pc jump in digital ad revenue -- in the second quarter while the owner of the 'New York Times' said digital advertising had jumped by more than a fifth in the three months up to the end of June.
This week IAB Ireland, the trade body for the Irish online advertising business, released the results of their first ever 'Online Adspend Study' of the Irish market.
Carried out in conjunction with PricewaterhouseCoopers (PwC), the study showed that online advertising now accounts for about 10pc of the overall advertising market in Ireland and is continuing to grow.
At a total of €97m, however, its market share still lags behind the traditional media of radio (€139m), TV (€209m) and newspapers, which still lead the way with a €373m share of the €1bn market.
One of the main hurdles to online advertisers remains the lack of broadband in parts of the country. At the end of 2009, about 73pc of adults in Ireland used the internet compared to about 75pc of adults in the UK.
As a proportion of the overall advertising market, however, the online sector in the UK is about three times as big as Ireland.
The main reason? About 94pc of UK internet users have broadband access, in Ireland that number is about 60pc.
Suzanne McElligot, chief executive of IAB Ireland, thinks that for online advertising in Ireland to flourish, it is critical the entire country gets access to fast, reliable broadband.
"A person using dial-up is more likely to use the internet only for basic utilities. People with access to broadband spend much more time surfing the internet and it becomes a much bigger part of their lives. Without that, online advertising will not be able to move forward."