Why expand into Europe?
Open any newspaper and you are faced with predictable doom and gloom when it comes to the financial outlook in Europe.
Financial markets are dropping, the Euro is facing a four year low against the dollar and fears of a double-dip recession are widespread.
With countries like Spain (the 9th largest economy in the world), experiencing close to 20% unemployment, Europe seems an unlikely place for businesses to expand into.
However, Intela, a global performance marketing company with offices in the US and a European headquarters in London is doing just that, and growing its market share aggressively.
Intela has three main revenue streams: Lead Generation, Email Marketing and its own Publisher Platform. All of these channels are purely online (allowing for increased reporting, speed of campaign deployment and tracking ROI). Intela specializes in providing prospects and consumers on a cost per acquisition basis to advertisers.
But why is Europe an explosive potential market and why are “first to market” companies like Intela and others succeeding in potentially choppy waters?
Here are some of the trends identified in the latest report from the IAB European Online Advertising Report that are contributing to exciting growth:
1) The continued move from offline to online advertising
In the UK (a mature market in terms of online activity), online advertising in 2009 had a like for like growth of over 4% despite the difficult economic conditions prevailing. In Europe, the aggregate figure is 4.5% but look again and you will see that Spain has a figure closer to 7.7%. Other markets such as Poland, Turkey and Greece all grew in double digits in the same period.
2) The shift of advertisers owning their audience rather than renting media space
Due to the increased fragmentation of traditional media channels like TV and radio, brands are looking to actually own their audience and communicate to them on a tactical “one to one” basis. More relevant user data collected in this process means enhanced CRM capabilities and higher return on investment.
3) The move from buying media on a distribution (CPM) basis to a cost per acquisition (CPA)
Tougher times mean advertisers are looking to increase their margins wherever possible. Moving to a performance model (the dominant method of online marketing in the U.S.) ensures less marketing / acquisition budget is wasted on campaigns where there is no guarantee of customers.
4) Increased responsiveness to online advertising of users in emerging countries notably France and Spain
With less frequency of emails, banners and general online “clutter” users in emerging European markets are far more responsive.
Take for example, email. On broadcasts in Spain compared to the US, open rates can be up to 500% higher. Equally, click through rates (CTR) can be as much as five times over a US average. With metrics like this, the resulting ECPM (revenue from emails delivered) can look very promising indeed.
Combine leading edge technology established through operating in a more competitive market and it’s easy to see why companies are looking over the channel to extend their reach.
The Euro area in crisis? Maybe … but with every cloud comes a silver lining!
Written by Zach Measures, Commercial Director
