'New era' in advertising on the way: IAB
29-03-2007
by Charlie Taylor

Online ad spend overtook that of national newspapers in the UK in 2006 for the first time with over STG2 billion splurged on internet advertising.

That's according to a new study carried out by the Internet Advertising Bureau (IAB) in association with PricewaterhouseCoopers and the World Advertising Research Centre.

Last year, a whopping STG2,016 billion was spend online by advertisers overall, an increase of 41.2 percent compared to 2005.

The huge surge in ad spend means that the internet's share of all advertising revenues in the UK now totals 11.4 percent, up from 7.8 percent the previous year.

Advertising across all traditional media combined fell by STG466.1 million year-on-year, a 2.9 percent decline. However, with the increase in online advertising spend, the entire market grew by 1.1 percent.

The IAB said that with almost all expenditure on traditional media in decline, the upward momentum of the internet reflects a new era in marketing communication and consumer behaviour, one which is driven by high-speed broadband take-up and user-generated content.

In addition to overtaking expenditure in national newspapers, which rose by just 0.2 percent to STG1.9 billion, online ad spend is now just over half the size of the TV ad market, which experienced a decline of 4.7 percent to STG3.9 billion last year.

Moreover, in the second half of 2006, online advertising experienced its highest market share ever reported when expenditure topped STG1.098 billion -- a 12.4 percent share of total UK advertising.

According to the latest findings, there was strong growth for display advertising, classified and paid-for-search ads. Online display ads (which include banners, skyscrapers and online sponsorships) jumped 35 percent year-on-year, while paid-for-search rose 52 percent and classifieds were up 45 percent.

The online advertising market in the UK is led by the recruitment sector, up 2.7 percentage points, followed by the finance and technology sectors.