Online ads save UK from slump

Internet advertising broke through the £1.3bn barrier in the first half of 2007, preventing the UK advertising industry from slipping into recession.

The latest figures from the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers show that the online advertising sector grew by 41.3% year on year to reach £1.33bn, lifting its share of UK adspend to almost 15%.

The total UK advertising market grew by 3.1% during the first half of the year to £9.1bn. However, without the contribution of digital media, total adspend would have fallen by £1.9bn. 'Online advertising is still bringing home the bacon,' said IAB chief executive Guy Phillipson. 'The UK advertising economy would be in a much sorrier state without it.'

The rapid growth of online advertising puts it on course to reach a value of £2.75bn by the end of the year. Internet adspend has already leapfrogged national press and direct mail, with analysts expecting it to overtake TV by the end of the decade.

The value of digital display advertising increased by 33% year on year to hit the £287m mark as marketers continued to take advantage of banners, skyscrapers and rich-media formats, including video ads.

The classified sector jumped by more than 70% during the same period to £277.7m, with recruitment, automotive and property advertisers shifting budgets online from print.

Paid search continued to drive the sector forward, complementing the strong performance of other digital disciplines. Sponsored listings grew by 44% to £762.3m, accounting for more than 57% of total online adspend.

Social networking sites such as MySpace and Facebook have yet to contribute significantly to the growth of online advertising in the UK, but the IAB expects them to be a key driver next year.

Data file

* Recruitment was the top online advertising category, rising by 5.3% to account for 24.7% of the market.

* Automotive overtook finance to take a 12.5% share of the market, while telecoms brands accounted for 6.7% of all online ads.

* The property sector grew by 1.4% year on year to achieve a 5.7% share of online adspend.

* Consumer goods' share of spend rose by 0.7% to 5.3%.

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