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OECD Observer

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Online marketing is thriving in response to the pervasive shift to young and hip internet users from yesterday’s couch potatoes. After falling 18% during 2002, online advertising experienced an upturn, with revenues expected to have increased 12% during 2003 to around US$6.6 billion, some of the largest brands having increased their online marketing budgets.

Half of the top online advertisers in 2002 were Fortune 500 companies, compared with just two in 2000. Agency executives predict that online advertising expenditures will increase rapidly, to as much as 15% of total ad spending.

In 2002, three of the top 10 advertising agencies in the world were based in the United States (Omnicom, Interpublic and Grey Global), three were based in Japan (Dentsu, Hakuhodo and Asatsu-DK) and there were two in the United Kingdom (WPP and Cordiant) and France (Publicis and Havas).

The three largest advertising agencies, Omnicom, Interpublic and WPP Group, each accounted for around 15% of worldwide income from advertising and marketing, making the industry relatively concentrated. These “big three” agencies also appear to be gaining market share, having accounted for a combined 43.7% of worldwide advertising and marketing services gross income in 2001, compared with 38% in 2000.

©OECD Observer No 243, May 2004

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