CREATION: Ad agencies to see less growth in online advertising next year

<p>Hong Kong's advertising agencies should not expect significant </p><p>growth in Internet advertising next year, according iCom (International </p><p>Communications Agency Network). </p><p><BR><BR> </p><p>A global survey by the company revealed Hong Kong was likely to see </p><p>bigger benefits from interactive TV as dotcoms were likely to reduce </p><p>their advertising spending because of financial difficulties and </p><p>closures. </p><p><BR><BR> </p><p>Mr John Cohen, chief executive of PMP Advertising, told CReATION that </p><p>while he expected next year to be more profitable for agencies in Hong </p><p>Kong, he did not expect much revenue to be generated through online </p><p>advertising, as agencies and clients were "too green" in terms of </p><p>technology and the Internet. </p><p><BR><BR> </p><p>"At the moment we're not seeing much (online advertising) from our </p><p>clients. </p><p><BR><BR> </p><p>It is mostly the dotcoms advertising on the Internet, and I don't think </p><p>that's going to change. But I'm certain we are going to see more dotcom </p><p>closures in the coming year. </p><p><BR><BR> </p><p>"That coupled with great confusion over which sites provide effective </p><p>advertising potential and very low recall of banner ads doesn't bode </p><p>well for the future of the Internet as an advertising medium." </p><p><BR><BR> </p><p>He added that interactive TV would be more profitable "once it gets </p><p>going" as it would be easier for clients to make the transformation. </p><p><BR><BR> </p><p>"It's (iTV) more conventional advertising - something the clients can </p><p>understand. It's something they know more and is not as dreamy as the </p><p>Internet so they can relate to it better ... There are lots of </p><p>opportunities when you consider interactive TV. I don't know exactly </p><p>when it will come, but when it does, it's going to get moving fast. It's </p><p>certainly more exciting," he said. </p><p><BR><BR> </p><p>Mr Cohen added he did not expect rapid changes in the advertising sector </p><p>next year. </p><p><BR><BR> </p><p>The survey found that more than half of the respondents cited Internet </p><p>and interactivity as the areas to have the biggest impact on businesses </p><p>next year. </p><p><BR><BR> </p><p>Further, 19 of the more than 30 agencies responding to the survey said </p><p>the Internet would continue to be key, with the focus on gearing up and </p><p>putting the Internet more into perspective as part of a broad media </p><p>spectrum. </p><p><BR><BR> </p><p>The report added that interactivity was at varied stages of development </p><p>in different parts of the world, but would be the fastest growing medium </p><p>in the US, UK, Australia, Japan, Austria and Switzerland. </p><p><BR><BR> </p><p>Contrary to Mr Cohen, Smee's Advertising president Mr Anthony Smee said </p><p>clients were beginning to understand the Internet's good opportunities, </p><p>as well as its "wasteful parts". </p><p><BR><BR> </p><p>"This gives much better clarity on the client's Web strategy, as it </p><p>links into the rest of the business and as advertising communication </p><p>companies work out strategies for those clients. More effective Web </p><p>design and ecommerce is going to come out of it. </p><p><BR><BR> </p><p>"For Europe, the fact that America has been the learning curve/standard </p><p>has helped, and the gap between the US and Europe has become much closer </p><p>on the Internet." </p><p><BR><BR> </p><p>Other areas likely to have an impact on agencies include integration of </p><p>services, difficulty of recruitment of qualified staff and economic </p><p>slowdowns or political turmoil in certain countries. </p><p><BR><BR> </p><p>The company said its 74 agencies in 44 countries generate billings of </p><p>USdollars 3 billion. ICom has 13 member agencies in Asia-Pacific. </p><p><BR><BR> </p><p>It was originally founded as the National Federation of Advertising </p><p>Agencies and later became the International Federation of Advertising </p><p>Agencies. </p><p><BR><BR> </p>