Online Adspend To Rise 27% In 2008

Advertisers will spend £3.4 billion online in 2008, a rise of 27% from the year before, according to new online ad spending figures released by eMarketer.

Internet advertising spending will continue to show double-digit growth through 2010, said eMarketer, passing £4.3 billion in 2010 and exceeding £5 billion in 2012.

Internet advertising should hold its own in the UK, and may even consolidate gains over other media during the economic decline, according to the UK Online Advertising: Reaching Maturity report.

Because online channels are more accountable and cheaper than television, print and other traditional media, they can help advertisers to boost brand and market share even when money is tight.

There are a few reasons why internet advertising will remain robust in the UK, said eMarketer. For one, researchers expect the internet to pass television in market share of UK advertising in 2010. And, spending on search and display ad formats was up sharply in 2007.

Search-related marketing accounted for 50% of all UK online advertising spending in 2006, and 60% in 2007, according to eMarketer calculations.

“While the rate of growth in search-related spending is falling slightly as the market evolves, annual growth is still remarkable,” says Karin von Abrams, senior analyst and author of the report. eMarketer estimates that UK spending on search rose 57% between 2006 and 2007 and will top £3 billion in 2012.

These new figures reflect the UK’s dominance online. The UK leads Europe in Internet advertising. Indeed, online spending accounts for a far higher proportion of total advertising spending in the UK than in almost any other country and online advertising has already passed 10% of total advertising spending.

Figures released last month by the Interactive Advertising Bureau and PricewaterhouseCoopers estimated that US internet advertising revenues for 2007 are estimated to grow to $21.1 billion, a 25% increase over the previous revenue record of nearly $16.9 billion for 2006.

In December, media regulator Ofcom published research revealing that advertisers in the UK spend more money per person on internet advertising than any other country, at £33.

The second annual International Communications Market Report said that this figure is twice as much as France, Germany and Italy combined (see UK Advertisers Spend More Per Person Online Than Any Other Country).