October 08 2006

Internet advertising nears £1 billion

Figures from the IAB/PwC put online advertising at nearly £1bn, rivalling press for share of spend. That's nice, of course, but the comparison should also be made with direct marketing too.

The IAB reports a 43% year on year increase in online advertising spend to take 10.5% of market share.

The statistics on the IAB site make interesting reading, but it's worth noting that search marketing represents some 58% of the 'online advertising' total. To me this is not comparing like with like.

Much of the TV and press advertising is brand-building or awareness generation. It's not a direct response activity, for the most part.

While it's good to see spending on 'pure' display and banner advertising increasing, that's a factor of a pan-channel approach by brand owners, as well as a reduction in the overall spend on TV advertising. As TV advertising struggles to demonstrate ROI, and as all research shows that the target demographics (oops - I mean "customers") are spending time at the keyboard, it's logical that the ad spend will follow the eyeballs.

Search engine marketing should, however, be compared with other direct channel activity - direct mail, outbound telesales etc - in order to get a true view of the relative importance of SEM to the overall marketing mix.

In the meantime this data is further evidence (as if this were required!) of the place of online in the marketer's armoury.

Ian Jindal