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UK: Online adspend set to overtake TV in 2009
Date: 08/04/2008
Online advertising revenues will overtake traditional television ad revenues by 2009, as internet adspend jumped 38% last year, according to a report by the Internet Advertising Bureau.
The IAB said that faster broadband speeds and greater ownership of laptops propelled internet advertising spending by 38% on a like-for-like basis last year to £2.8bn, taking its market share to 15.3%, up from 11.4% in 2006.
That represented a slowdown from 41% growth in 2006 and 66% in 2005, but it beat the IAB's forecasts of 35%.
The internet, which is now the biggest medium behind TV and press display advertising, is expected to sidestep the downturn in other media to overtake TV advertising revenues next year, the report said.
Guy Phillipson, chief executive of the IAB, said: "To grow 38% from £2bn to £2.8bn is a very powerful performance.
"It's clear marketing directors now recognise the value of online to drive their business and more and more are using rich media and video to build their brands, just as they do on TV."
The increasing popularity of social networking websites, the availability of cheap laptops, wireless connectivity and TV on demand, such as Channel 4's 4oD, were cited as the key drivers behind growth last year.
The report, which was compiled in partnership with accountancy firm PricewaterhouseCoopers and the World Advertising Research Centre, showed the internet was the biggest driving force behind overall advertising growth in 2007.
Online formats such as display ads, banners and video, all grew 31% last year, while embedded formats now make up almost 80% of total display advertising, after growth in the sector doubled within two years.
Elsewhere, the market for paid-for search ads is "not slowing but maturing" as advertisers use the medium "more intelligently".
The report said: "Brands are now... getting a greater return on investment through 'key phrases' and more accurate targeting that reflects consumer behaviour."
Classified advertising online also experienced substantial growth, up 54% last year to £585.3m. Recruitment companies remained the heaviest spending advertiser in this sector, with a 25.7% market share.
The automotive sector was the next biggest user of classified advertising with 11.9%, while technology leapfrogged finance for the first time to take third place.
Source: Brand Republic
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