• by October 23, 2000

Although there are virtually no business models known today that earn their profits with online advertising alone, accumulated figures for online advertisements are up and pointing upwards.

According to a recent study by IDC, European online advertising spending currently stands at just over 818 million euros and is set to rise to over 2.6 billion euros by 2003.

"Europe is catching up with American Internet advertising figures," said Thomas Raschke, research analyst with IDC's Internet and eCommerce Strategies program.

"However, lingual, cultural, and business non-homogeneity require a different, more targeted approach than in the U.S."

The Nordic countries and the United Kingdom are the frontrunners in European Internet advertising, with France and Germany important due to their size and economic power. Smaller countries such as the Netherlands, Belgium, and Switzerland have above average online ad spending.

"Southern European countries represent a huge potential since Internet, ecommerce, and consequently online advertising are still in their infant stages," Raschke added.

Trends in Online Advertising:

* The classic banner ad still takes up most of Europe's ad space although increasingly is finding itself replaced by more advanced, rich media banners. In addition, Internet sponsoring and so-called pop-ups are claiming ad impressions.

* Fairly low Internet access speed in Europe is hindering attempts to increase the multimedia content of online advertisements. Broadband and fast mobile technologies will indirectly help Europe's advertising industry to make its campaigns more targeted and interesting.

* Viral marketing -- promoting brands by offering free products and services and thus creating word-of-mouth and cult advertisements -- demonstrates innovative advertising on the net does not have to be banners alone.

* Since online advertising is fairly new, the industry is lacking standardization because every portal, large publisher, and network has defined its own system for online advertising and tracking ad success and so on. As the market matures, de facto standards will emerge or will be initiated by European interest groups such as the Coalition for Advertising Supported Information and Entertainment.