Online Adspend Overtakes Radio In 2004

Online advertising expenditure in the UK topped £653.3 million in 2004, compared to £407.8 million in 2003. With an increase of 60% year on year and a record market share of 4.3%, online has overtaken radio’s share of 3.8% for the first time.

According to new figures from the Interactive Advertising Bureau (IAB), PricewaterhouseCoopers LLP (PwC) and the World Advertising Centre (WARC), 2004 was a coming of age year for online advertising.

Advertising revenues are now four times bigger than they were at the height of the dotcom boom in 2000, with 2004 showing strong growth across every quarter as marketers continued to increase their investment in online throughout the year.

Last year, the vast uptake of online advertising produced another record, setting a half year figure of £373.9 million and a half year market share of 4.3% (see Internet Adspend Rockets By 76% In First Half).

It was the second half of 2004 however, which saw the biggest increase in real terms since the industry’s official tracking research began, leaping by almost £95 million on the first six months of the year.

Quarter 3 and quarter 4 set successive quarterly records, reaching £177.1 and £196.7 successively. Q4 showed the single biggest quarter of investment since tracking research began, with a year on year quarterly growth rate of 64%.

Compared to with other media, the online sector has now overtaken the radio, with a 4.3% market share against radio’s 3.8% market share

Commenting on the figures, Guy Phillipson, chief executive of the IAB said: “There’s a massive cultural shift going on forcing a change in consumer and advertiser behaviour. The triple crown of cheap broadband, cheaper technology and ever more compelling content is driving consumers to the internet pulling advertisers online.”

Paul Pilkington, director at PricewaterhouseCoopers, added: “The outstanding growth in online revenues reflects a greater confidence in the medium. Online has clearly established itself as a mainstream advertising channel.”

Overall, online aided the general advertising trend as total UK expenditure rose just 5.8% in 2004 to £16.9 billion in 2004, revealing that the online industry is significantly ahead of its targets to overtake the market size of Outdoor by November 2007.

Figures published on Friday by the Advertising Association (AA) confirm the increasing strength of the internet. In predicting UK advertising expenditure to rise by 4.3% in 2005, the internet is forecast to be the single fastest growing medium, increasing more than 33% compared to 2004 (see UK Adspend Forecast To Rise By 4.3% In 2005).

IAB: 020 8683 955 www.iabuk.net

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