Canadian Online Ad Spending Heats Up

NOVEMBER 21, 2007

Canadians really “get” the Internet, but ...

“Canada’s online development has been a paradox,” says Karin von Abrams, eMarketer senior analyst and author of the new report Canada Online Advertising. “The country has one of the best broadband infrastructures in the world and higher household Internet penetration than the United States.”

“The online population is engaged, tech-savvy and independent-minded. Canada is home to a cutting-edge computer games industry, assisted by substantial tax breaks. The size of the country and its pioneer heritage encourage efficiency and progressive thinking,” says Ms. von Abrams.

“Yet Canadian companies have generally been slow to advertise online.”

According to a number of sources, Internet advertising and marketing accounted for little more than 5% of total advertising spending in Canada in 2006.

“This in a nation where three in five online homes used a broadband connection, at a time when Internet users spent more than 13 hours online each week,” says Ms. von Abrams.

Admittedly, Canada’s entrepreneurs tend to be cautious. Given the country’s small population, audience size and ROI are crucial. Advertising dollars need to work hard, and many firms have held back from online experiments to focus on media they know. But the situation is finally changing.

In 2006, spending on Internet advertising in Canada rose by 80% and passed the C$1 billion (US$894 million) mark for the first time.

eMarketer projects that online advertising spending will pass C$3.0 billion (US$2.44 billion) by 2011—roughly tripling its value in 2006.

“The shift is underway,” says Ms. von Abrams. “Canada’s agencies and in-house marketers are honing their skills in digital channels. Leading Canadian content owners are increasingly forming partnerships to make the most of their assets online. And it is easier than ever for the country’s advertisers to use the Internet effectively.”

For more on what’s going down up north, read the new eMarketer report, Canada Online Advertising, today.