Online Ad Spending Predicted To Soar 35% Internationally

by , Aug 25, 2006, 6:00 AM
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Online ad spending will climb to $11.6 billion internationally this year--marking a growth rate of 35 percent, predicted Merrill Lynch in a new report Thursday.

Previously, the brokerage house had forecast 33 percent growth for the year. For 2007, the international online ad spend is projected to climb to $14.5 billion, marking 24 percent growth; the prior estimate called for 25 percent growth.

By country, Merrill Lynch predicts that China will show the highest growth in online ad spending this year--50 percent. The United Kingdom comes in second (46.4 percent), followed by France (45 percent), Australia (42.6 percent), South Korea (30.5 percent) and Japan (30 percent).

The brokerage house also examined agencies and Internet companies that stood to gain from international growth. aQuantive--which recently acquired Neue Digitale in Germany and Amnesia in Australia--was seen as especially likely to do well outside the United States. "We believe they will be one of the leading players to capture the strong growth abroad," stated the report.

Merrill Lynch also was bullish on Google's international prospects, stating that the search giant has more than a 70 percent market share in the United Kingdom, Germany and Italy--three key markets in Europe. Yahoo didn't get as positive a report, with Merrill Lynch predicting that Yahoo's share of international advertising will drop from 11 percent in 2005 to 10 percent this year.

The brokerage house also said that Omnicom's prospects for international growth looked good. Omnicom, the report stated, "has a strong presence internationally that should enable the company to expand its international online services abroad as well as to capture this growth."

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