SPENDING ON ONLINE advertising in Ireland has experienced record growth in 2011 – with €65 million being spent in the first half of this year alone.
The surge accounts for a 20.5 per cent increase, compared with the same period in 2010, according to a bi-annual spend study from IAB Ireland and PricewaterhouseCoopers.
The IAB/PwC online adspend study noted the market share of online advertising spending is now valued at 13 per cent – with strong growth observed in video and social media.
The study indicates that brands across Europe have begun to embrace online advertising in growing numbers, with increased spending on online video and social media sites being seen as “important contributors” to the growth of this format on the Irish market.
Online is now the third highest media advertising channel – outstripping spending in radio, outdoor, cinema and magazines, according to the study.
An estimate of spending on mobile advertising has been addressed in the study, which notes a dramatic surge in smartphone usage. The increase in mobile internet access has contributed to an estimated spend of €1.6 million in the category first half of this year.
The study found that increased access to broadband in Ireland, both fixed and mobile, has driven growth in this sector. Fixed broadband access increased by eight per cent between the second quarter of 2010 and the same period in 2011, while mobile broadband access grew by 14.8 per cent in the same period.
More time spent online
Irish internet users also now spend greater amounts of time online: the average user spends 2 hours and 44 minutes online each day (compared with an average of 2 hours and 49 minutes watching TV) and spends about eight hours each week on social media sites. The heaviest users of social media are 18 – 24 year olds, who spend an average of 11 hours a week using social media.
The largest area in online spending is paid-search advertising at €27.2 million, which has seen a growth of 17 per cent year on year, and now represents 45 per cent of total online spending.
Classified advertising also continues to represent a significant section of the online market (21 per cent) with spending reaching €12.7 million; property and recruitment ads accounting for the majority of spending for the first six months of this year, at 36 per cent, while auto adverts come in second at 28 per cent.
The top three categories to see investment in display media (graphic advertising such as banner adverts) are telecommunications, fast-moving consumer goods and entertainment/media, each representing 12 per cent of spending. The study notes how this growth is reflective of brands enlarging their online budgets to embrace digital advertising channels.
The total media adspend has been marked at €508.3 million. However, when spending on media advertising is excluded (accounting for 13 per cent of the market), this figure drops to €443.4 million – down 1.5 per cent down on last year.
There are positive signs that spending in online advertising will continue to grow, with 77 per cent of the participants in the adspend study anticipating “growth” or “strong growth” in the coming six months. It is also expected that, due to an anticipated increase of 55 per cent in Irish smartphone ownership next year, mobile browsing will overtake desktop browsing.
Commenting on the study results, Chief Executive of IABIreland Suzanne McElligott said the record 20 per cent growth tracked in the H1 2011 report highlighted how digital advertising had moved to “centre stage in the media mix”.
“With the continued growth in online usage and increased time being spent online, digital advertising is now a significant driver for brand growth for advertisers,” McElligott said.
Similarly, Bartley O’Connor, Advisory Consultant at PwC, said that the study demonstrated “the level of activity and vibrancy of the online industry in Ireland at a time when many other industries are experiencing difficulties”.
O’Connor said that Ireland was now at “a tipping point” and that all businesses needed to consider their digital strategy – paying special attention to how they plan to capture the opportunities associated with the migration to digital platforms.