Social media sites ’slow’ web ad growth
Growth in UK internet advertising revenues, accrued from such techniques as paid search and pay-per-click, could slow down as a result of increased usage of social media sites, a new study claims.
A report from forecasters at marketing services group WPP says that the greater amounts of time users are spending on sites such as Facebook and MySpace might result in an internet advertising slow down - but adds that any deceleration will be mild relative to sluggish broadcast and press advertising growth.
It says that revenues from UK internet advertising will be increase by 37 per cent in 2007 and then by 30 per cent in 2008 - both down on the 48 per cent rise registered in 2006.
Meanwhile, media and marketing revenues as a whole will increase by a relatively paltry 2.6 per cent over the year, the study says.
"The rationale behind the internet slowdown theory is that UK broadband penetration can’t continue growing at the same rate, and how much more time can people spend online?" Adam Smith, director of WPP subsidiary GroupM futures, said
"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.
"In addition, running in the opposite direction is the growth of social networks which are much more ad-resistant."
