Row rages over claims of stunted UK online sector

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Online publishers and ad sales executives have hit back at claims that the UK market for online advertising may barely exceed 43m ($70m) by the year 2000, a fraction of the anticipated $5bn (3.2bn) US market.

Peter Storck, group director of online advertising at Jupiter Communications, told an audience of UK advertisers, agency and new media executives last week that the value of the European market for online advertising would continue to trail well behind the US into the next millennium.

He provoked more controversy by suggesting that 1996 UK online revenue may have been just 650,000, way down on other estimates.

This figure, he said, is not based on modelling estimates but actual tracking of banner (display) ads on Websites, with revenues calculated taking ratecard values for banner ad audiences.

“We think that the UK stood at $1m last year, $5m lower than the estimates,” he said. And while UK online advertising may rise to 44m ($70m) by the year 2000, this will significantly trail the 150m predicted for the German market.

Jupiter is projecting European-wide online revenue to reach a modest $13.6m (8.7m) for 1997, rising to $60m (38.4m) in 1998 – equivalent to the online ad total for the US in 1995. But Andy Batkin, chief executive of Softbank Interactive Marketing, who hosted the “Marketing on the Internet” workshop, hit back at Jupiter’s projections.

“I can’t accept that the European market for 1997 will be $13m. I would predict $30m to $40m, based on what we have seen in talks with clients,” he said. He also insisted that estimates of monies attracted to the online sector needed to reflect the additional sponsorship and promotional spends by advertising clients.

Tom Bowman, commercial director of ZD UK, said: “The reason that the figures are so low is that there are not the people around making the sale. That’s got to – and is going to – change.”

Gordon Simpson, director of operations at Softbank’s London office, said he knows of three Scandinavian sites whose combined ad targets for this coming year exceed Jupiter’s projections for European-wide online display revenue.

But Storck stuck to his guns over the low short-term projections for the European market. “The sites represented by people speaking at this workshop may be doing well, but they are a large proportion of the UK online ad revenue take,” he said.

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