Web puts the squeeze on UK broadcasters

Advertisers have continued to divert cash away from traditional media as UK consumers spend more time using digital services, according to Ofcom.

Data released by the regulator showed UK online ad revenue surpassed ITV1 and Channel 4's combined ad sales last year, as internet consumption ate into TV audiences.

Google’s UK turnover of £800m was equivalent to nearly 80% of ITV1, Channel 4 and Five’s total ad revenues, and far exceeded that of the UK radio ad market, which was down 3.4% last year to £512m. But while TV ad revenues fell 2.2% last year to £3.47bn, earnings from TV subscriptions passed the £4bn mark.

The figures mirror web industry data, and highlight UK consumers’ and advertisers' gradual shift away from traditional media. The amount of time consumers spent watching TV fell 4% between 2002 and last year, while radio listening dropped 2%.

The report also highlighted growing uptake of digital video recorders, saying 15% of all UK households were using them by the first quarter of this year. Of those, 78% said they used the devices to skip commercial breaks - although Ofcom said respondents tend to exaggerate how much they shun ads.

James Thickett, director of research at Ofcom, said:

"This may force broadcast advertisers to change their models. The challenge is to find new kinds of advertising that engage people.”

On the web, the report also found changing patterns of usage, with women aged 25 to 34 now spending 20% more time online than men of that age. Nearly 30% of total time spent on the net is now accounted for by over-50s.

Ofcom said eBay was still the most popular web destination, although Bebo, MySpace, Facebook and YouTube were all in the Top 10 sites by time spent.

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