Facebook pushes UK online advertising past £4 billion
UK online advertising was up 12.8% in 2010 to break the £4 billion milestone, according to the bi-annual IAB and PwC ad spend study.
With total UK ad spend in 2010 valued at £16.6 billion, the internet market share has reached a record high of 25%, with £1 in every £4 spent online.
The IAB’s report attributes the 27.5% year on year surge in online display advertising to £945 million to the ‘Facebook effect’.
“In 2010 the biggest gain was display advertising, thanks to a nearly 200% surge in display advertising in a social media environment (on a like-for-like basis) and 91% year on year (absolute growth) in video formats,” the report says.
“Expenditure on pre-, mid- and post-roll video advertising nearly doubled to £54 million (£28 million in 2009). Overall display grew by more than a quarter (27.5%) on a like-for-like basis to a new high of £945.1 million, representing 23% of total online spend (up from 20% in 2009).”
Consumer goods manufacturers became a top three display spender in the first half of the year with 12% share. However, the top spender in online display is finance with 15.2% share. Entertainment and media has dipped slightly to a 14% market share.
Paid-search also continues to perform strongly- up 8% year on year on a like-for-like basis to £2,346 million, representing 57% of total online spend (61% in 2009).
Classified advertising also bounced back in 2010 – up 9.7% on a like-for-like basis to £751 million – a 18% share.
Meanwhile, mobile advertising has experienced impressive growth of 116% year on year (on a like-for-like basis), up from 32% in 2009. Advertisers spent £83 million on mobile advertising in 2010, led by the entertainment and media sector, but with encouraging growth from finance, telecoms and consumer goods advertising.
Guy Phillipson, chief executive officer of the IAB, said: “Major brands restored their advertising budgets in 2010 and online was a big winner, breaking through the £4 billion barrier and accounting for a quarter of total UK media spend. The power of online to build brands is clearly reflected in the spectacular growth of display, thanks to the popularity of social media and video formats. And with mobile advertising finally coming of age, marketers are enjoying an incredible array of digital opportunities.”
Anna Bartz, strategy manager at PwC, added: “2010 was an exciting year for online advertising – full year growth figures are strong at 12.8% on a like-for-like basis and some 15% in absolute growth. All formats – display, search and classifieds – contributed, although display showed the strongest recovery. This was driven by video, social media and mobile, channels which build a strong foundation for 2011.”
The IAB said the key drivers for growth include increased media budgets (the total advertising market grew 7.2% as 77 of the top 100 advertisers increased spend, according to Nielsen); a bigger online audience (the UK’s active online user base was up to 40.3 million in December 2010 – UKOM and Nielsen); and faster broadband services, which drive video advertising (penetration of broadband access in internet homes is now 98% – Kantar Media).
Also, the UK is still glued to social media – social networks now account for 25% of the time spent online in the UK. This is reflected in the growth of display advertising spend as brands are able to tap into the social nature of the web, according to the IAB/PwC.