Maisie McCabe, Media Week, 16 September 2008, 11:05am

Online ad spend increases as firms cut back in other areas

LONDON - Companies are increasing their online ad spend despite cutting back in other areas and are looking to use the web to advertise across international boundaries, according to a new report out today.

The European Interactive Advertising Association has released figures showing four out of five advertisers say they have increased their online ad spend and predict it will continue to grow in the next two years.

Multinational campaigns are estimated to have increased in value by 150% in the last three years and are expected to generate more than €175m (£139m) in net revenue in 2008.

Advertisers are currently allocating 11% of their online ad spend to campaigns on a pan-regional level. On average, pan-regional advertisers have seen their year-on-year revenue increase greater than their local equivalents.

The research shows advertisers in Europe have seen how Europe-wide deals can complement local campaigns and multinational plans with European elements are being booked from the Americas and Asia, as well as the individual European markets.

Advertisers said money is being spent online rather than print, TV and direct marketing, with 73% of advertisers saying they were spending more online, while 31% said they were using television less and 40% said they were decreasing their use of newspapers.

Advertisers are increasingly recognising the value of online ads, with three in four of respondents believing it has a positive affect on the brand.

Display remains the dominant format but search and affiliate advertising are experiencing rapid growth. According the report, four out of five advertisers are currently looking to increase their search spend in the coming months.