Total spending on television advertising rose by 14% to 287m last year, the Institute of Advertising Practitioners in Ireland (IAPI) estimates. Spending looks set for a second consecutive year of double-digit increases, according to leading agencies.

Mediaworks, the media buying division of Dublin advertising agency Owens DDB, estimates that television spending will grow by more than 10% this year.

"We're certainly making more TV spots for our clients and I'd imagine it is a similar story throughout the industry, " said managing director Mark Hogan.

Hogan said a broader range of advertisers have started spending money on television ads. "In 2005 we would have made more ads than in 2004 and our client base didn't change that much.

People who weren't doing it before are doing it now."

Two Owens DDB clients, financial services company IFG and ice-cream producer Silver Pail, are new converts to television advertising. For many companies entering the television battlefield, cost is an important factor. The advent of digital technology has helped reduce production times and cut cost, making television more affordable for clients who would previously have ruled it out, Hogan said.

Irish agencies have also taken to outsourcing production, filming ads in locations such as South Africa and Argentina. Both have strong indigenous TV and film industries, with crews and facilities available at a fraction of the cost of their Irish counterparts.

Orlaith Blaney, managing director of McCann Erickson Dublin, said television ads can now be produced on a (relative) shoestring. "We did a 10-second spot for a client last year for 12,000, " she said. In an environment where budgets can stretch to as much as 2m for a 30second ad, that counts as a bargain.

More cost-effective production has helped stimulate demand for television advertising, but the current strength of the sector is underpinned by increased confidence about the economy, according to Chris Cawley of Dublin agency Cawley Nea/TBWA. "The advertising industry is incredibly volatile and television commercials are at the peak of the cycle, " he said. "In bad times television significantly underperforms and in good times it overperforms."

He sees clear signs that advertisers are feeling more confident about their business prospects for the year ahead.

"We've got 12 commercials in production which is a lot, especially at this time of year."

Financial services companies and telecoms companies are among the biggest spenders. Banks and building societies such as Ulster Bank and Permanent TSB have been advertising to win current account business following the introduction of rules to enable customers to switch accounts more easily.

With the government-backed SSIA scheme due to end over the next year, advertising of pensions and investment products has also begun as institutions bid to snare their share of the SSIA windfall. Meanwhile, the arrival of new mobile phone entrant 3 and Eircom's takeover of Meteor have prompted an increase of advertising activity in the telecoms sector.

"I remember somebody saying to me a couple of years ago that telecoms is the new beer, " said Ray Sheerin, managing director of Chemistry, whose clients include Meteor. Brewing giants such as Heineken and Diageo were traditionally the heavyweight advertising spenders. Sheerin said they have now been joined by companies such as Vodafone and O2.

In its most prolific year so far, Chemistry created 15 television advertisements, he said. With less than a quarter of this year gone, it has already produced six.

"We've had one of the busiest years we've ever had in television production, " Sheerin said. It's not just the volumes that are up. In most cases we're seeing that clients are increasing budgets. This year there is so much more confidence around."