UK Online Adspend Nears £1 Billion
In the first six months of 2006, online advertising expenditure has reached almost £1 billion and looks set to overtake spending on national press advertising before the end of the year.This is according to new research from the Internet Advertising Bureau (IAB UK), PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC).
Online stayed the fastest-growing advertising medium in the UK, with a market share of 10.5% for the first six months of the year, up from 7.3% for the same period in 2005.
This takes online advertising to within one percentage point of national press, which recorded an 11.4% share for the first half of 2006.
ZenithOptimedia recently released a revised forecast for UK adspend growth, which predicted that the internet will grow to have a 17.2% share of total UK adspend by 2008 (see ZenithOptimedia Downgrades UK Ad Growth Forecast).
The research shows that whilst TV, press, radio, and direct mail have all experienced declining revenues in the past six months, online has buoyed the advertising market by contributing an additional £284 million to total UK advertising revenues.
The internet is now double the size of outdoor (5.1%), double the size of consumer magazines (4.6%) and three times the size of radio advertising (3.4%).
Online is also now half the size of the TV advertising market, which recorded a 22.7% market share following a decline of 1.3%.
Paid-for search (sponsored listings that advertisers pay for when a consumer clicks through to their site) was 57.7% up year-on-year to £531.3 million.
Online display advertising rose 33.2% to £215.9 million and a 23.5% share of all online adspend, making it easily the fastest-growing display medium.
The research identifies the increasing adoption of broadband, with 10 million people estimated to be using the high speed service, and new online ad formats, amongst other developments, as two of the drivers behind the growth seen in the first half of 2006.
Guy Phillipson, chief executive of the IAB, said: “This has been a very tough market, marked in most media by loss of confidence and declining advertising expenditure. In this environment, it’s encouraging to see the internet turning over nearly half a billion pounds a quarter, showing healthy growth from an already high base.
“The gap between online and newspaper advertising is narrowing fast and if this growth rate continues then we will be a £2 billion medium by the New Year.”
Paul Pilkington, director, Entertainment and Media practice, PricewaterhouseCoopers LLP said: “Internet advertising can deliver well understood and segmented audiences, highly relevant context, measurable results, and a good return on investment.
“From this perspective, it is hardly surprising that internet advertising revenues have continued to grow, and that the medium is fast becoming part of the mainstream advertising mix.”
A recent report from eMarketer forecast that US online adspend will go past the $25 billion mark by the end of 2010 (see US Online Adspend To Reach Over $21 Billion).