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Sat, Nov 25, 2006 - Page 10 News List

UK firms spend more on Internet advertising: survey

AFP , LONDON

British firms are planning to invest more in online advertising as households increasingly use the Internet for routine purchases, a new survey said yesterday.

Online spending on marketing will rise by 50 percent from ?2.2 billion (US$4.2 billion) this year to ?3.3 billion in 2009, said the survey by the Internet search group Google and Confederation of British Industry (CBI).

The firms surveyed are likely to spend nearly ?13 billion in three years in Internet-based technology, up from the current level of about ?10 billion a year.

"Six years after the dot.com bubble burst, the Internet is driving really substantial change among businesses," Richard Lambert, director general of the CBI, said in a statement.

"Firms are learning more about harnessing the Internet to benefit their staff, their customers and their future prospects," he said, but added they still had a long way to go.

In Britain, nearly eight companies out of 10, or 77 percent, and nearly half of all households, or 44 percent, had broadband Internet access in the first quarter of this year, according to Eurostat statistics published this month.

That compares to 75 and 32 percent respectively on average in the EU and 86 percent and 30 percent in France.

Sixty percent of British consumers believe that the Internet has given them more power and 43 percent say that the new technology is making companies more accountable.

And nearly half of British consumers, or 44 percent, still refuse to buy online because they cannot examine items before buying and 40 percent because it is costly and complicated to return a product.

One quarter of people surveyed distrusted purchasing goods and services online.

Faced with the trend, 58 percent of firms surveyed planned to invest more in online advertising, though 70 percent admitted they still had a lot to learn about the field.

Forty-five percent of firms say they use e-mail as the most common method of online marketing, but 76 percent of consumers say e-mail ads end up in the "spam box."

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