April 15 2008
Web bigger than TV
The amount of money spent on Internet ads in the UK will be worth more than that spent on TV by the end of 2009, according to new research.
The new findings from (IAB), the UK online advertising trade body, carried out in partnership with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC), reveal a continued healthy growth as online looks set to overtake spending on TV by the end of 2009.
Online advertising has grown from being the smallest market sector in 2003 to the third largest in 2007, with a new high of £2.8 billion. This represents a 38% year-on-year like-for-like increase, taking the Internet advertising to a market share of 15.3% (up from 11.4% in 2006). Internet advertising spend in 2007 exceeded the most generous forecasts and is now larger than press classifieds and regional newspapers.
In just three years online advertising spend has increased by £2 billion. In a relatively buoyant UK advertising market the internet was the biggest driver of growth – accelerating nine times faster than the entire advertising sector, which experienced 4.3% growth to reach £18.4 billion.
Total internet display advertising spend saw a 31% year-on-year increase, whilst the core formats – banners, skyscrapers and embedded rich media including video – grew by 45% to £592 million. Furthermore, spend on embedded formats has doubled during the past two years to account for 79% of total display.
The majority of display spend rests with portals and major online publishers, but an increasing volume is being brought through sales networks. Sales houses and networks are responsible for growing and monetising the long tail of internet sites, accounting for 40% of display advertising in 2007.
Paid-for search marketing is maturing, but not slowing, as marketers become more sophisticated in their use of the medium. In 2007 search grew by 39%, in line with overall growth, to £1.6 billion (£1.2 billion in 2006), while its market share remained largely the same at 57.6% (57.8% in 2006).
