UK internet advertising expenditure grew to £1.68 million in the first half of 2008, a 21% year-on-year like-for-like increase, according to the latest online adspend figures from the Internet Advertising Bureau (IAB).
The research said that without the growth shown by online, the advertising market as a whole would have experienced a 4.6% decline in the first-half of the year rather than the actual 0.7% year on year fall.
Carried out in partnership with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC), the research also found that online increased its market share by four points to 18.7%, 0.6% behind total press display (19.3%) and 3% behind TV (21.7%).
Paid-for search continues to lead the way, growing by 28% year on year and was worth £981 million in the first half of 2008, with its market share marginally up to 58.3% of total online advertising (57.8% in first half of 2007).
Total internet display advertising spend rose 16.3% year-on-year to £333.8 million. This was boosted by a 36.6% increase in spending on ’embedded’ formats such as banners, rich media and video. Internet display ads are still the only major display medium to be growing, said the IAB, so this increase reflects confidence in its ability to engage consumers, build brands and drive sales.
An analysis of display advertising revenues in terms of sector split reveals that Technology is the top category with a 17.3% market share, followed by Finance at 11.9%, Entertainment & Media at 10.7% and Recruitment at 9.9%.
Classifieds grew by 30.2% year-on-year to £361.6 million as recruitment, property, automotive and small ads continued their migration to the internet from print classifieds, which declined 10% year-on-year.
Guy Phillipson, chief executive officer of the IAB UK, said: “Online is not immune from the economic downturn, but while other sectors see falls in expenditure the internet is still experiencing an incredible increase and is propping up the entire advertising market.
The IAB said that key drivers for growth include cheaper broadband, the launch of catch-up TV services such as BBC iPlayer, and social networking websites, among others.
Last month, PwC forecast that although UK online ad spend should post double-digit growth this year, it is likely to fall as the economic downturn takes effect (see UK Online Adspend To Record Double Digit Growth This Year).
Online research firm eMarketer, meanwhile, predicted that search advertising will claim 60% of online ad spending in the UK for at least the next few years (see Search Advertising To Claim 60% Of UK Online Adspend).
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