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Sarah UKFast | Account Manager

UK Internet ad spend up 38%, to overtake TV in '09

Online advertising in the UK grew from the smallest sector in 2003, to the third-largest in 2007, with more than £2.8 billion in expenditures — a 38 percent year-on-year increase — and a market share of 15.3 percent (up from 11.4 percent in '06), according to findings released this week, MarketingCharts writes. Online looks set to overtake TV spend in the UK by the end of 2009, becoming the largest medium, projects the study by the Internet Advertising Bureau (IAB) UK, carried out in partnership with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC). Internet advertising spend is now larger than that of press classifieds and regional newspapers. In three years online advertising spend has increased by £2 billion. In a relatively buoyant UK advertising market the internet was the biggest driver of growth accelerating nine times faster than the entire advertising sector, which grew 4.3 percent to reach £18.4 billion. Below, other findings issued by the IAB:
  • Total internet display advertising spend increased 31 percent year-on-year, while the core formats - banners, skyscrapers and embedded rich media, including video - grew 45 percent to £592 million.
  • Spend on embedded formats has doubled during the past two years to account for 79 percent of total display.
  • The majority of display spend rests with portals and major online publishers, but an increasing volume is being brought through sales networks. Sales houses and networks are responsible for growing and monetizing the long tail of internet sites, accounting for 40 percent of display advertising in 2007.
  • Paid-search marketing is maturing, but not slowing, as marketers become more sophisticated in their use of the medium:
  • In 2007 search grew by 39 percent, in line with overall growth, to £1.6 billion (£1.2 billion in 2006).
  • Search market share remained largely the same at 57.6 percent (57.8 percent in 2006).
  • Brands are now using search more intelligently, getting a greater return on investment through key phrases and more accurate targeting that reflects consumer behavior.
  • Classified advertising grew 54 percent year-on-year and was worth £585.3 million in 2007, as consumers and marketers recognized online's exceptional reach, flexibility and immediacy.

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