U.K. online ad spend growth to slow

While online ad spending will rise by 34 percent in 2007 it will slow to 30 percent next year, according to GroupM’s recent studies. Both figures are well below the 48 percent rise in 2006.

As the take up of broadband and the amount of time spent online begins to level out there’s only so much more space and opportunity remaining in which to target consumers with online ads.

The Financial Times quotes Adam Smith, GroupM futures director, as saying: “Unless we can find more ways of shoe-horning advertising into sites or vendors increase the amount of advertising inventory they sell, then at some point it has to slow.”

Another factor discussed by GroupM in the report, called "This Year, Next Year UK 2007", was the rise in popularity of social networking sites. Time spent online may have risen, but so has participation in social networking activities which aren’t necessarily compatible with traditional online advertising methods. Once advertisers have found a way to interact with social network users the landscape for ad placements will broaden.

Tags: online ad spend, online advertising, social networks, U.K.