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Markets News Afternoon: Web advertising overtakes TV in UK; Irish construction output dips by 39.3% in Q2 2009; Shares slide in US and Europe
By Finfacts Team
Sep 30, 2009 - 3:56:51 PM
In the first half of 2009 internet advertising weathered the recession and grew by 4.6% to £1,752.1m, despite the entire advertising sector contracting by 16.6% during the same period. The web overtook TV advertising for the first time.
According to the bi-annual online advertising expenditure study from the Internet Advertising Bureau (IAB) - the trade body for digital marketing - in partnership with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC) - - the internet has now overtaken TV advertising to become the UK’s single biggest advertising medium.
The UK remains the world leader in terms of market share for online, with the medium accounting for 23.5% in the first half of 2009 - - compared with about 4% in Ireland. The results signal a significant restructure of marketing budgets as advertisers follow their audiences online and look to the internet for even more measureable and accountable methods.
Paid-for search continued to grow, proving itself a mainstay of marketing budgets with a 6.8% increase from H1 2008 to H1 2009. As the purest form of direct response advertising, search is proving recession-friendly with marketers investing £1.05bn during H1 2009, which equates to 59.8% of all online advertising expenditure.
Despite the property market crash and stalled automotive and recruitment sectors, classifieds grew by 10.6% to £385m - - or 22% of all online ad spend - - reaping the benefits of the continued migration of advertising from print to online formats.
Online display was down 5.2% year on year to £316.5m, with an 18.1% share of all online advertising revenues. Online display buoyed a tough year as all other mainstream media saw a double digit decline.
The study also breaks down the online display market by industry category, to identify who the top spenders are and how investment is increasing or decreasing across sectors. The results show that Technology is the biggest spender, accounting for 19.1% of the market, followed by Telecoms (13.3% rising from 9.7% the previous year) and Finance (13.2% up from 11.9%). Entertainment and Media was fourth with 11.8%, while Consumer Goods saw significant growth up from 6.2% in H1 2008 to 8.1% in 2009 as FMCG marketers steadily increased digital budgets.
Guy Phillipson, chief executive of the Internet Advertising Bureau, said:
“Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions. Online display has performed notably well against its peers in TV, print and radio despite more than £1.5 billion being wiped off the advertising industry. We have a rollercoaster of a year ahead but even in tough economic conditions marketers still recognise the value, accountability and measurability of online advertising.”
Irish construction output plunges
The CSO reported today that output from the building and construction industry plunged 39.3% in the second quarter of 2009.
The dip in the volume of output largely reflects drops of over 58% and almost 34% respectively in residential building work and non-residential building work.
Output in civil engineering fell by almost 8%.
Output in the Eurozone dropped by 7.3% and by 8.8% in the EU27, the CSO said.
The largest increases were in Greece (up 61%), Germany (3%) and the Czech Republic (1.2%). The biggest declines were in Lithuania (down 48%), Ireland (39%) and Latvia (32.4%).
Jeff Ivory, of Stonebridge Financial Partners, and Lakshman Achuthan, of Economic Cycle Research, share their market insight on CNBC:
US
The US lost 254,000 private sector jobs from August to September 2009 on a seasonally adjusted basis, according to the private sector ADP National Employment Report, which was released today. The estimated change of employment from July to August was revised by 21,000, from a decline of 298,000 to a decline of 277,000. In a third estimate of GDP (gross domestic product) in the second quarter issued by the US government, the contraction was less than previously estimated.
The Institute for Supply Management-Chicago said today its regional business PMI (Purchasing Managers' Index) indicator fell to 46.1, compared with 50 in August. Readings below 50 signal contraction.
The indicator is viewed as an early signal of the health of the manufacturing economy nationwide.
On the markets, investors reacted to the PMI data and the Dow Jones Industrial Average dipped 124 points, or 1.3%, at 9617. The Nasdaq Composite Index was off 1.1% and the S&P 500 dropped 1.2%
Reports that China's CNOOC is looking to buy proven reserves on already-licensed land in Nigeria is causing friction between the local government, local militants and western partners. Abiola Lawal, SVP of CAMAC, the largest privately owned US oil company in Nigeria, discusses the situation:
Oil
On the New York Mercantile Exchange, oil for November delivery is trading at $66.47 down 24 cents from Tuesday's close. In London, Brent crude for November delivery is trading at $65.27 a barrel.
Currencies
The euro is trading at $1.4609 and at £0.9154.
For live currency updates, check the right-hand column of the Finfacts home page.The dollar traded at a record low $1.6038 per euro on July 15, 2008.
