June 25 (Bloomberg) -- Internet advertising spending will surpass radio this year, with about 9.5 percent of ad budgets worldwide allocated to online media, said Steve King, head of Publicis Groupe SA's ZenithOptimedia unit.

``Internet has already overtaken cinema and outdoors,'' King said at a presentation to analysts in Paris today. ``This year it will overtake radio. In a couple of years it's going to overtake magazines as an advertising media.''

Advertising spending on the Internet will increase 26 percent in 2008, with the majority of the growth coming from search-related ads, according to ZenithOptimedia. The overall global ad market is estimated to rise 4.7 percent, King said.

Consumers spend 15 percent of their time on the Internet, while 9 percent of advertising budgets are on the Web, leaving room for growth, King said. He said rising Internet use will also drive online ad spending, with 19 percent of the world's population having Web access in 2008, compared with 17 percent last year.

Internet ad spending will overtake magazines in 2010, King said in an interview at the conference. Radio will account for about 9 percent of advertising budgets this year, according to the executive.

``Radio is still growing, funnily enough, because of digital,'' King said.

Digital Growth

Publicis Chief Executive Officer Maurice Levy has said digital advertising will account for 25 percent of the company's sales by 2010. Digital ads accounted for 18 percent of first- quarter revenue, up from 13 percent a year earlier.

To bolster its Internet business, Publicis bought online ad agency Digitas Inc. for $1.3 billion last year. The company said today it will create a unit that brings together its digital operations to boost Internet sales. David Kenny, head of Digitas, and Jack Klues, chairman of Publicis Groupe Media, will run the new organization, to be called VivaKi.

``Digital is the most promising value creating tool and opportunity that I have seen in my lifetime in this business -- and I have grey hair,'' Levy said at today's meeting.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net.

Last Updated: June 25, 2008 08:13 EDT