Advertising expenditure on the Internet will account for almost half of this year's growth in advertising spending, according to Zenith Optimedia, the media buying group.

The increase in UK advertising spending is expected to total £556m, of which £255m will be spent on the Internet. This year's overall advertising expenditure is expected to be £12.2bn against £11.65bn last year.

The Internet has become the fastest growing segment in advertising over the past few years. According to Zenith Optimedia, advertising spending on the Internet is expected to total £1.1.bn this year, compared with £7m in 1997.

The increase in the uptake of broadband has meant that more people spend their free time online, prompting advertisers to spend more on Internet advertising. Advertisers like the fact that the Internet is an accountable medium where they can see who has clicked on their adverts and the impact on the advertising expenditure.

The main source of growth for Internet advertising has been search-based adverts, according to executives.

Anthony Young, chief executive of Zenith Optimedia, said online advertising would continue to develop as part of the core marketing strategy. "Marketers are looking to diversify their advertising risk into different channels beyond traditional media."

The growth in Internet advertising has hit radio and regional newspapers. Publishers have said the decline in print classified revenue was partly due to the decline in consumer activity but have been busy buying online recruitment, property and auto sites.

The world cup is expected to provide a boost to budgets. Spending on advertising overall is predicted to grow 4.8 per cent this year against 3.3 percent last year.

So what impact will the increase in Internet advertising spend have of small businesses?

Based on the research carried out by Zenith Optimedia my take on the impact on small businesses are:

1. An opportunity for skilled Internet entrepreneurs to exploit opportunities relating to Google Adsense, Overture / Yahoo MSN and small niche targeted advertising web sites.

2. An opportunity for skilled Internet entrepreneurs to benefit from pay-per click advertising where cost per click, value per click and conversion is geared more towards writing effective direct response ads ("salesmanship in print").

3. An opportunity for skilled Internet entrepreneurs and SEO (search engine optimization) firms to benefit from getting web sites to rank high in the search engines.

4. An opportunity for skilled Internet entrepreneurs who can drive traffic to web sites and use the "funnel method" to drive and convert prospects towards higher product propositions.

5. An opportunity for entrepreneurs to use the "two step" method to drive traffic to web sites to build their lists and convert prospects, also following up prospects and customers offline with higher priced products and services.

David
Small Business Resource