Michael Hennigan

The inspired idea of a  cash-strapped British student to host micro-advertisements on a single web-page, has made him a millionaire in under six months. The site, milliondollarhomepage.com (the site was hit by Denial of Service attacks, prompted by the global publicity this week), which began as a blank space divided into 10x10 pixel squares, was picked up by bloggers and transformed into an internet advertising phenomenon.

In March the Internet Advertising Bureau (IAB) is expected to confirm that online advertising in the UK topped £1 billion in 2005. The Financial Times says that internationally the internet is expected to account for 4.6 per cent of advertising spend this year, rising to 6.4 per cent by 2008, according to Zenith Optimedia, the industry forecasters.

The milliondollarhomepage

Online now accounts for a larger share of the UK market than in most of the rest of the world. IAB estimated that UK online advertising at the 2005 half-year was 5.8 per cent of the total advertising market - a bigger share than either radio or outdoor media.

Guy Phillipson IAB CEO says that "2005 was the year when online really went mainstream, 2006 will be the year we prove its efficacy as a branding medium. The research we are working on will help media agencies plan online and advertisers understand how cost effective it is as a brand builder in the media mix. In addition we'll hold more sector specific conferences and try and top Engage 2005 with Engage 2006 in October."

Guy Phillipson IAB CEO

The Rich Media Roadshow - an initiative that saw the IAB taking to the road to extol the creative potential of broadband and the brand building capabilities of rich media - was launched in December. The first stop was Vodafone, where the IAB says "eager Marketing Managers saw with their own eyes the best creative our industry has to offer."

Industry analysts say that online advertising spending has further potential to expand, arguing that the proportion of advertising budgets being spent online versus other media, is still far behind the proportion of time people are spending on the internet rather than watching television, reading newspapers or listening to the radio.

The Irish Market

Finfacts has been online since March 1997 and in the early years we had plenty experience of talking to marketing personnel at meetings with various companies about the web and it was quite common to quickly detect symptoms of MEGO (My Eyes Glaze Over). The reaction to the web was at glacial pace and then when the First Tuesday meeting phenomenom hit Dublin, 300-400 people packed meetings at the Temple Theatre, not to hear articulate-challenged pitchers looking for funding, but to avoid missing out on this great marvel called the web.

The glacial speed days returned with the dot-com bust and are still with us.

The IAPI (Institute of Advertising Practioners of Ireland) reported last autumn that that Irish online spend for September stood at €639,510, accounting for 0.06 per cent of all ad revenue for January-September 2005. The Irish Times reported that Gary Power of Saor Communications said a more viable figure would be €1.3 million.

John Kennedy in the SiliconRepublic.com reports Simon Ferguson of Sales Online as saying:

“As an indicator of total spend in 2004/2005, online display advertising in Ireland was valued at €8m, classified advertising such as recruitment, motor and property sites is worth some €15m and the whole area of online search is worth up to €10m. In total that adds up to almost €35m. The total figure for advertising in Ireland annually is about €1.3bn so the online advertising side is worth only 2 per cent of that.

The rise of search advertising such as the Google Adsense Program where revenues are shared with hosting sites, has been a very welcome development.

Local company advertising is currently at a low level on business content sites. 

Placing ads on Google is attractive for a business that has not a large advertising budget. As for spending from big budgets, traditional media channels can be the default choice for both advertising agencies and advertisers as producing an imaginative online campaign can initially result in more time and hassle.

Still far to go in adapting to the Web

An illustration of the glacial pace of adapting to the web in the Irish business world, is provided by public relations firms and the communications departments of big companies.

Apart from the regulatory requirements for public companies, it is common when a press release is issued on for example a report, it takes at least 24 hours before the information is placed on the organisation's website, if at all.

Does it ever occur to PR personnel who may have for example arranged a short radio interview for a client, that an interested party may access the organisation's website to view the report?

A good content management system, that can be easier to use than MSOffice, can cost as little as $250!

Two culprits from this week come to mind: PricewaterhouseCoopers and NCB Stockbrokers.