UK Online Advertising Market Grows Up In 2002

After a difficult 2001, during which the market grew by only 7% (see UK Online Adspend Growth Falls Dramatically, But Outperforms 2001 Media Market), online is once again the fastest growing advertising medium, growing three times faster than the industry as a whole and faster than any other marketing channel. Three figure growth rates are a thing of the past but the UK is outperforming the US where internet adspend fall by 17% last year (see US Online Adspend Drops 17% In 2002).

The data, published by the IAB and PricewaterhouseCoopers LLP, shows that online ad expenditure totalled £196.7 million in 2002, up from £165.7 million the previous year. The internet’s market share is now 1.4%, as opposed to 1.2% in 2001, and the industry is on track to reach the IAB’s target of 2% of UK advertising spend by autumn 2004.

“The figures are heartening news and a wake-up call for the marketer who sees their website as the end of their online presence,” said Danny Meadows-Klue, chief executive of the IAB. “Following contraction in the advertising industry during 2001, the 2002 figures prove that online has bounced back. Smart marketers know that the internet is not a fad and are seeing the value of brand-building integrated campaigns that complement other media activity.”

The IAB claims that the internet is no longer perceived as a risk and is therefore attracting investment from traditional advertisers who previously steered clear of new media. The growing popularity and maturity of the web, reliable traffic measurement systems and new ad formats have raised the profile of online advertising (see INSIGHTanalysis: The Internet Approaches Maturity) which is now regularly used in cross media campaigns.

UK Online Advertising Revenue Trends
Year	Revenue (£ million)	YoY Growth (%)
1998	19.4	n/a
1999	51.0	162.9
2000	154.7	203.3
2001	165.7	7.1
2002	196.7	18.7
Source: IAB/PricewaterhouseCoopers LLP, April 2003