UK web adspend overtakes TV
- Added:
- Sep 30, 2009
The UK online ad sector grew a healthy 4.6% to £1.75 billion in the first half of this year.
Figures out today from PricewaterhouseCoopers and the IAB confirmed online bucked the trend in the recession – with the rest of the advertising economy tumbling almost 17% over the same period.
That’s consistent with growth rates about 20% above the total ad sector. Online advertising took 23.5% of all UK adspend in the first half of the year, extending its lead over other media and confirming it is now significantly larger than the television ad industry.
The UK remains the most mature online advertising economy in the world with the highest market share of ad spend going online.
The mix of advertising spend grew in line with forecasts with paid-for search continued to grow (up 6.8% from the first half of 2008).
As the purest form of direct response advertising, search is proving recession-friendly with marketers investing £1.05bn during the first six months of 2009 - around 60% of all online ad spend.
Classifieds grew by 10.6% in real terms to £385m during the same period, accounting for just over a fifth (22%) of all spend. In contrast online display shrank by around 5% (5.2%) to £316.5m to 18.1% of all online adspend.
The migration out of banners and MPU formats should be seen in the context of a much steeper fall in newspaper and television display advertising.
The IAB identified five ‘key drivers for growth’ for online advertising this year:
1. Advertising networks boosting the market: Alongside the major portals, advertisers are increasingly turning to networks to book their online campaigns. According to Econsultancy research, 70% of online advertisers and their agencies work with three online advertising networks or more. Almost half (46%) the say they are working with more ad networks than a year ago, an average of 31% of online display advertising budget is believed to be spent on online advertising networks.
2. Online as a direct response medium: This year has seen marketing budgets being stretched to their very limits, and online has proved its worth. With improved planning and insight tools which mean more advertisers flock to the medium to take advantage of its targeting, accountability and measurability.
3. Growth of new display formats: With the proliferation of video, the internet has become a highly engaging entertainment medium. Alongside tried and tested methods such as rich media, pre and post roll online video advertising is showing strong growth (a 195% increase year-on-year). This indicates advertisers’ willingness to experiment and invest in more engaging and interactive multimedia content.
4. Ecommerce booming: In a time of recession, people buying and shopping are taking to the internet for the best deals, making online the best place to reach bargain-hungry consumers. The continued annual growth in the online retail market is evidence that online is withstanding the challenges of the economic downturn and the retailers that continue to expand and improve their online presence.
5. Faster, cheaper broadband: 92% people now have a broadband speed on over 2MB and 56% of home broadband users now have wireless broadband driving audiences online and allows advertisers to provide consumers with richer branded content (BMRB Internet Monitor May 2009).
Summary of ad spend in 2008
Across all 2008 advertising expenditure on the internet was £3,349.7 millions, a market share of 19.2%, following a 17.1% year-on-year increase. Spending online in 2008 increased by £540 million year-on-year as total UK advertising spend fell by 3.5% to £17.5bn.
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