Web advertising in Europe posts healthy growth

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Advertising on Web sites in Europe reached $109.1 million in August, according to AdZone Interactive's first formal report on the European Internet market.

AdZone calculations show European Web advertising grew at a double-digit clip from the $98.3 million it tracked in July.

But Europe remains in the shadow of the U.S., whose Web market AdZone measured at $1.4 billion in August.

"Europe is in the early growth stages" for Web advertising, said AdZone President John Cardona. "This is the way the Web was I'd say three years ago in the United States."

The Internet Advertising Bureau reported $906.5 million in U.S. Web advertising in 1997, averaging about $75 million a month. Spending reached $1.95 billion in this year's first quarter, or more than $650 million a month, according to the IAB's most recent data.

BOOM ON THE WAY

Mr. Cardona said he expects European Web advertising will boom during the next year.

"In probably 12 months time," he said, "Europe is going to be very close to the U.S. (Web spending) of today," though "the U.S. also is going to grow."

European sites have a sizable audience, but for now they are "not as marketing-savvy," charging lower rates and not "really selling aggressively" compared to Web advertising sales in the U.S., Mr. Cardona said.

The U.K. accounted for 59% of Web ad revenue in August across nine countries that AdZone tracks in Europe. The nine also include Austria, Denmark, France, Germany, Italy, Spain, Sweden and Switzerland.

Among these countries, Mr. Cardona said, Italy's Web ad growth is the standout. In August, Italian sites generated just $5.2 million in ad revenue, with the top 10 sites pulling in $4.3 million, AdZone estimated. But that $5.2 million was more than double July's $2.3 million.

"Italy is growing faster than we ever saw the U.K. grow," Mr. Cardona said. "Italy is going to be the country to watch."

AdZone launched earlier this year, starting with the U.S. market. It competes with AdRelevance, part of the newly merged Jupiter Media Metrix; and CMRinteractive, part of Competitive Media Reporting. Mr. Cardona formerly worked at CMRi.

AdZone's estimates are generated by counting ads on Web sites around the world and then applying the rate-card ad rate. Mr. Cardona said AdZone has seven computers surfing 75,000 U.S. and European sites every day. It delivers data on about 1,300 U.S. sites and 900 European sites that account for 95% to 97% of the regions' Web ad spending, he said.

AdZone will begin formally tracking sites in Asia later this year.

OVERSTATING REVENUE

Because of rampant discounting, Web rate cards are largely fiction, and Mr. Cardona acknowledged AdZone's reliance on rate cards means it overstates revenue. But he said AdZone uses the published rates because of the difficulty in assessing discounts at specific sites.

"The whole idea of our service is to give a consistent methodology," Mr. Cardona said. That allows for comparisons of Web advertising across sites, regions and time periods.

Copyright September 2000, Crain Communications Inc.

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