UK Internet spend overtakes TV

IAB figures show ad expenditure online up £82m to record market share of 23.5%.Search, classifieds and online displayTechnology, telecoms and finance leading the way

In the first half of 2009 internet advertising weathered the recession and grew by 4.6% to £1,752.1m, despite the entire advertising sector contracting by 16.6% during the same period.

According to the bi-annual online advertising expenditure study from the Internet Advertising Bureau (IAB) – the trade body for digital marketing – in partnership with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC) – the internet has now overtaken TV advertising to become the UK’s single biggest advertising medium.

The UK remains the world leader in terms of market share for online, with the medium accounting for 23.5% in the first half of 2009. The results signal a significant restructure of marketing budgets as advertisers follow their audiences online and look to the internet for even more measureable and accountable methods.

 Paid-for search continued to grow, proving itself a mainstay of marketing budgets with a 6.8% increase from H1 2008 to H1 2009. As the purest form of direct response advertising, search is proving recession-friendly with marketers investing £1.05bn during H1 2009, which equates to 59.8% of all online advertising expenditure.

Despite the property market crash and stalled automotive and recruitment sectors, classifieds grew by 10.6% to £385m – or 22% of all online ad spend – reaping the benefits of the continued migration of advertising from print to online formats.

Online display was down 5.2% year on year to £316.5m, with an 18.1% share of all online advertising revenues. Online display buoyed a tough year as all other mainstream media saw a double digit decline.

 Guy Phillipson, chief executive of the Internet Advertising Bureau, said: “Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions. Online display has performed notably well against its peers in TV, print and radio despite more than £1.5 billion being wiped off the advertising industry. We have a rollercoaster of a year ahead but even in tough economic conditions marketers still recognise the value, accountability and measurability of online advertising.”

Eva Berg-Winters, online advertising expert, PricewaterhouseCoopers LLP said:
“Perhaps surprisingly, a slowing economy has accelerated the migration to digital technology and hence the continuing shift from more traditional forms of advertising to online, which promises return on investment and measurability in a period of instability. The only certainty is that this transgression demands fundamental structural change of business models across all industries.”

Across all 2008 advertising expenditure on the internet was £3,349.7 millions, a market share of 19.2%, following a 17.1% year-on-year increase. Spending online in 2008 increased by £540 million year-on-year as total UK advertising spend fell by 3.5% to £17.5bn.

IABUK : UK internet ad spend grew 4.6 per cent to £1.75 billion in H1 2009.