Online adspend up 52% in paid search boom

Online adspend up 52% in paid search boom

Online advertising spend is up 52% year on year to £507m while paid-for searches have become the fastest growing media channel, according to a report by Starcom UK.

"In 2004, the media saw online ad revenue grow by 52%, hitting £507m. Having eclipsed cinema in ad revenue terms in 2003, it is now rapidy approaching the scale of radio," the Starcom UK media market report revealed.

The media planning and buying agency also revealed that paid-for searches on Google, Yahoo! and MSN are becoming the fastest growing media channel, with advertisers bidding to achieve the highest position on the results page.

Display advertising still accounts for the largest proportion of online adspend at 46%, although paid search now accounts for 32%. Classified advertising accounts for 12% and acquisition emails make up the final 10%.

According to the Starcom: "Consumers are accessing the Internet via search engines to help inform their purchase decisions.

"AOL has published research stating that 42% of consumers have changed their minds and switched to an alternative brand as a direct result of using the Internet."

The report also revealed that one in four people goes online every day and 49% of all use is now via broadband, with penetration up 81% in the past six months.

Some 16 million people have bought items online in the past six months, with around 10% of all retail sales taking place over the Web. The increased popularity of buying online is due primarily to higher Internet speeds and increased data capacity.

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