Optimedia predicts that by the end of 2001 Internet advertising revenue will be greater than income from cinema ads.
Although there will be a slowdown in online advertising, Optimedia forecasts that the medium will see a growth rate of 110 per cent, with revenue rising from &£100m in 2000, to &£210m in 2001.
Optimedia European research director Anthony Jones says: “A number of commentators have predicted the demise of Internet advertising, but we don’t see that happening. The Internet is still going to show healthy growth, but where that growth is coming from is changing, from dot-coms to traditional advertisers.”
Optimedia’s latest UK advertising and inflation estimates for the period 1999 to 2004 also anticipate a six per cent increase in advertising revenue for 2001 and a 4.3 per cent rise in overall media inflation.
Jones says the UK economy is in good shape but there will be a slight reduction in demand for advertising.
Optimedia estimates that apart from the Internet, cinema will have the highest revenue increase, of eight per cent, and radio the highest level of inflation (eight per cent) during 2001.
TV inflation looks set to rise to six per cent for 2001, compared with four per cent last year. The increase is partly due to the BBC’s and Sky’s assault on ITV’s share of viewing. Expenditure for 2001 is estimated to increase by seven per cent, in line with as last year, to &£3.5bn.
Optimedia predicts that revenue increases for national newspapers will be lower than in the recent past, dropping to three per cent for 2001.