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UK online ad networks to grow by 60% in 2008

LONDON - UK media spend on online advertising networks will grow by 60% in 2008 to an estimated £385m, according to a report published E-consultancy today.

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The report found that the pace of growth for ad networks continues to outstrip overall online display advertising.

It claims that this is happening due to improved understanding of the potential for return on investment and increased opportunities to reach the right audience effectively, for example through the use of behavioural targeting.

The market valuation is included in E-consultancy's new 2008 Online Advertising Networks Buyer's Guide, which contains an analysis of market trends and profiles of 28 leading networks.

The valuation of this sector is based on its estimate that overall display advertising will grow by 30% in 2008 to £770m, and that the networks' share of this type of ad spending will grow from 40% to 50%.

Linus Gregoriadis, head of research at E-consultancy, said: "Online ad networks operate in one of the most competitive spaces in the digital sector, and often one of the most controversial.

"But in spite of their challenges, networks continue to benefit as marketers raise their digital budgets and recognise the economies of scale networks bring to campaigns."

The report's last update, released in January 2007, estimated that media spending with ad networks doubled to £120m in 2006 and again in 2007 to £240m.

Gregoriadis added: "The growing influence and momentum of networks is evident from the large number of new players since our first buyer's guide on this topic in 2005. The best networks have been able to differentiate themselves with the use of behavioural targeting to help advertisers target their audience more effectively."

Headline market trends in 2008

  • Networks take larger slice of display advertising pie.
  • Publisher-driven networks add to competition.
  • Offerings broadened to provide one-stop-shop networks.
  • Brands exploit behavioural targeting to increase return on investment.
  • Advertiser concerns persist despite increased regulation.
  • Ad exchanges yet to gain traction among networks.

The ad networks featured in the buyer's guide are: 24/7 Real Media; AD2ONE; Adconion; Adknowledge; AdLink; Adpepper; Adsmart; Advertising.com; Adviva; Burst Media; Casale Media; dgm; DRIVEpm; .Fox; Indoor Media; Media Initiative Group; NebuAd; Oridian; Phorm (exchange); Sky Media; Tacoda; TradeDoubler; Tribal Fusion; Unanimis; Utarget.Fox, Valueclick Media; Wunderloop (exchange); Yahoo!.

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