UK internet advertising to hit £4.5bn in 2011

Internet advertising in the UK will increase to £4.5bn and account for nearly 30% of all UK advertising in 2011, according to a PricewaterhouseCoopers report released today.

Globally, the internet will remain the fastest growing advertising medium, with a projected 18.3% annual growth to $73bn (£37bn) in 2011.

The report also suggests the internet, TV distribution and video games will be the fastest-growing segments of the global entertainment and media industry.

Nearly half of the total global growth is expected to be generated through online and wireless technologies within the next five years. During the same period, broadband households will grow by 300m, to 540m subscribers, and wireless subscribers will increase by 1.1bn to 3.4bn.

Phil Stokes, head of entertainment and media practice at PwC, said the UK is the largest entertainment and media market in Europe, the Middle East and Africa, and is forecast to grow from $95bn in 2006 to $124bn in 2011.

He said: "This is driven by increased digital and wireless spending and the growth in broadband households, which will result in a broadband penetration of 80% of UK households by 2011."

But the report does suggest the migration to digital formats is having an adverse impact on competing revenue streams and consumer-generated media is accelerating content fragmentation.

Jim O'Shaughnessy, global chairman of entertainment and media practice at PwC, said: "Content, distribution and technology companies need to aggressively seek out new relationships to accommodate the shift towards convergence [of home computer, wireless handset and television platforms].

"Furthermore, companies will need to test new business models to address increased fragmentation and intellectual property in a digital era."

It is forecast that on a global scale, Brazil, Russia, India and China are to emerge as the principal growth drivers of the entertainment and media industry. Led by India and China, entertainment and media spending among these countries will continue to grow at double-digit annual rates during the next five years, accounting for 24% of the global growth.

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