Online Ad Spend In The UK Up 21%

    October 7, 2008

Internet advertising expenditures in Britain grew to $2.95 billion (1.68 billion pounds) in the first half of 2008, a 21 percent increase year-on-year, according to the Internet Advertising Bureau (IAB).

Marketers showed overwhelming confidence in online advertising at a time when all major advertising mediums experienced declines in expenditure.  The total advertising market was down 0.7 percent year-on-year, during the first six months of 2008. Without the Internet’s growth the advertising market would have experienced a 4.6 percent decline.

In real terms Internet advertising added $604.8 million (348.2 million) to its bottom line compared with the same period in 2007. Online exceeded expectations to increase its market share by four points to 18.7 percent, only 0.6 percent behind total press display (19.3%) and 3 percent behind TV (21.7%).

Paid- for search remained the leader, growing 28 percent year-on-year and was worth $1.7 billion (981 million) in the first half of the year, with its market share up slightly to 58.3 percent of total online advertising (57.8% in the first half of 2007). Search has become fundamental on the media schedule and is increasingly integrated into traditional and online advertising campaigns.

Total Internet display advertising spend increased 16.3 percent year-on-year to $578 million (333.8 million). This was lifted by a 36.6 percent increase in spending on embedded formats such as banners, rich media and video. Internet display ads are still the only display medium to be growing so this increase reflects the confidence in its ability to engage consumers, build brands and drive sales.

The majority of online display ad spend is still through major portals and online publishers, but sales networks representing thousands of smaller sites have increased their volumes for 41 percent of all display expenditure.

"Online is not immune from the economic downturn, but while other sectors see falls in expenditure the internet is still experiencing an incredible increase and is propping up the entire advertising market," said Guy Phillipson, chief executive officer of the IAB UK.

"The growth in internet advertising spend is beating all expectations as advertisers look to maximise their budgets, and take advantage of new display advertising formats such as video. They are also increasing their investment in paid-for search marketing because it delivers measurable returns on investment."