Service Providers in the Information Economy Make Limited Use of Online Advertising

Use of online advertising varies greatly amongst service providers in the information economy. Service providers in the telecommunications industry, however, spend the largest proportion of their advertising budget on online advertising.

Expenditure on online advertising represents 10 per cent of the entire marketing budget of service providers in the information economy. Businesses in the advertising sector itself also make rather mixed use of the internet for advertising. Advertising agencies spend on average five percent of their marketing budget on online advertising. Architects, however, make almost no use of the internet for marketing purposes.

These are the findings of a survey carried out by the Centre for European Economic Research (ZEW) in cooperation with Creditreform in June and July, 2015. The survey concerned approximately 1,100 service providers which are active in the information economy. Service providers in this sector include businesses offering information communications technologies (ICT), service providers (service providers supplying and leasing computer services, specialist ICT trade as well as telecommunications) and providers of knowledge-intensive services (businesses specialising in tax consultancy and auditing, management consultancies, architect offices, technical consultancy and planning, research and development as well as advertising).

Previous studies (report in the FAZ, 14th April, 2003, pg. 22) have indicated that 1.7 per cent of all expenditure on advertising in Germany is spent on internet advertising. Given the significant role that new information and communication technologies now play in daily business practices, in particular in the work of ICT-service providers, it is not unreasonable to expect that these businesses would make above-average use of internet advertising. One might also expect this to be the case for businesses in the telecommunications sector, where 10 per cent of marketing expenditure is used for online advertising. The proportion of total expenditure which ICT-traders and providers of computer services spend on online advertising is, however, at just one per cent of total expenditure, significantly below average. Online advertising currently plays no role in traditional, knowledge-intensive sectors, such as technical consultancy and planning as well as tax consultancy and auditing.

Contact

Dr. Margit Vanberg, E-mail: vanberg@zew.de