Online Advertising

Each year, online advertising sets new records globally and in the UK, with double-digit growth rates. It continues to outpace other media as advertising budgets flow from other media towards display, banner and other interactive ads online. Internet advertising space is forecast to earn more than TV advertising in the UK in 2009, according to the Internet Advertising Bureau (IAB). Phorm is an example of how technological innovation will drive the benefits of creative online advertising and marketing in the future.

Search advertising, with its price per click model (essentially you get what you pay for: someone interested in your offer clicks on the ad) still dominates with a share of 57.6% in the UK and 41% in the US. There's no reason to think this type of online business advertising won't continue to grow, as PPC campaigns are relatively easy to measure.

However, around a third of online advertising spend is directed towards display (34% in the US and 21% in the UK). In part, this lower proportion reflects the fact that there is less of an obvious connection between display ads and the actual customer purchase than with search, although that can change rapidly thanks to online advertising companies like Phorm.

As you'd expect from such a dynamic sector, innovation has driven development. Phorm's new behavioural targeting approach is likely to push online advertising tools, services and networks much further, through systematic industry research on behavioural trends and formats in the UK, and worldwide.

The simple concept behind this approach - which is underpinned by complex technology - is to imbue display advertisements with a greater understanding of consumers' interests. This means that display ads can be at least as relevant to users as search ads, if not more so. That's because targeted advertisements based on broader behaviour online are always going to be more accurate than relying solely on a search keyword. Greater relevance translates into better performance and return on investment for advertisers. Advertisers clearly agree: behaviourally targeted ad spending grew by 50% in the US last year according to eMarketer online advertising statistics. Sources: