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Internet ad spend up 16% to $84.8 bn in 2011: GroupM study

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MUMBAI: According to GroupM study, Internet advertising has seen a 16 per cent rise over the previous year reaching to $84.8 billion in 2011 and accounting for over 17 per cent of all global measured advertising expenditures.

With maximum digital ad spend of $34.5 billion, North America leads the chart. Asia-Pacific with $24.8 billion and Western Europe with $21 billion are next in the list.

The study titled ‘This Year, Next Year: Interaction 2012’ is GroupM‘s media and marketing forecasting series drawn from data supplied by parent company WPP‘s worldwide resources in advertising, public relations, market research, and specialist communications.

GroupM forecasts digital ad spend to touch $98.2 billion globally this year. The figure represents almost 19 per cent of all measured advertising investment.

In 2011, digital advertising spending hit $32.2 billion in the U.S. This represents a 22 per cent share of the overall domestic market and a 12 per cent increase over the previous year. This year those figures are expected to reach $35.4 billion for a 23 per cent share and a 10 per cent increase over 2011.

New York-based GroupM Interaction global CEO Rob Norman said, “At the risk of an ‘oh really?‘ response, it‘s possible to argue that for the first time since these reports began that the last year has been one of evolution rather than revolution. It seems that less is brand new and that a combination of scale of usage of an increasingly social and mobile web, the penetration of devices supported by it, and the continued atomization of audiences and content, in both their creation and distribution combine to tell the story of the year."

Norman added, "In 2007 we speculated about a world that would be truly social, searchable, mobile, addressable and interactive and illuminated by data that could be collected and applied across all marketing functions; in 2012 that is no longer a matter for conjecture."

The 20-country report also details ad investment in paid search and Internet display as well as providing data on broadband penetration, media time spent online and e-commerce per user data.

Digital advertising‘s share of total ad investment rose from 4.4 per cent worldwide in 2004 to a projected 18.8 per cent in 2012. The average percentage of consumers‘ ‘media time’ spent online increased from 11 per cent in 2006 to 19 per cent in 2011. The absolute number of broadband homes worldwide has nearly tripled in this period to reach 500 million, and the typical country has seen broadband penetration grow by half. Aside from general monetary inflation, ad investment growth has two main vectors: aggregate audience hours, and advertising intensity per individual. Average online advertising investment per online user doubled between 2006 and 2011. For 2011, Norway had the highest per-capita online ad investment in the study‘s sample - $200.

Additionally, e-commerce accounts for about 5 per cent of global retail sales today, with instant-on devices, secure and simple payment, vouchering, and the optimisation of retail for mobile serving as catalysts for growth. Consumer tablet penetration reached double digits in only three of the survey‘s countries in 2011: the US, Finland and South Korea. However, take-up is expected to be rapid and nine countries should reach double digit penetration in 2012.

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