MEDIA

UK online ad spend worth almost £1bn

Mark Sweney
Wednesday October 4, 2006
MediaGuardian.co.uk

UK internet advertising is worth almost half of TV advertising revenues, with just under £1bn spent in the first six months of this year, according to research.

The amount advertisers spent on the internet was up 40.3% year on year to £917m in the first half of the year - and will overtake press advertising spend before the end of 2006 at its current rate of growth.

According to the report by the Internet Advertising Bureau, the World Advertising Research Centre and PricewaterhouseCoopers, £993.4m was spent on national press advertising in first six months of 2006 - just £76.2m more than online - accounting for an 11.4% share of all ad spend.

The internet accounted for 10.5% of UK ad spend in the first half of 2006 - up from 7.3% for the same period last year.

TV's share of the market declined by 1.3%, to 22.7%, in the first six months of the 2006. UK advertisers spent £1.978bn on TV ads in total during that period.

By comparison, internet spend is now double the size of outdoor in the UK (5.1%), more than twice that of consumer magazines (4.6%) and three times the size of radio advertising (3.4%).

Within the overall internet advertising figures, paid-for search - sponsored listings on search engines such as Google that advertisers pay for when a consumer clicks through to their site - was up 57.7% year on year to £531.3m; a 57.9% share of the online total.

Online display advertising climbed 32.2% to £215.9m, accounting for a 23.5% share.

In the face of a year-on-year fall in traditional press advertising spend, online classified advertising grew 23.4% to £162.2m, taking a 17.7% share of all online revenues.

Recruitment and finance remain the biggest spending categories online. These are followed by strong growth in the entertainment and media and automotive sectors.

Internet ad spend is set to pass the £2bn mark in 2006, if current growth continues. In 2005, advertisers spent £1.4bn online.

The key drivers of growth include the rapid rate of uptake of broadband in the UK - the Office of National Statistics recently released figures showing that 10m UK households were now broadband-enabled.

According to a report by YouGov, the average amount of time spent online by users has climbed to 23 hours a week, also pushing ad spend growth.

Other factors include a continuing boom in online retailing, innovation in creativity and new marketing tools - such as blogs, podcasts and social networking websites - all attracting mass media popularity and more money online from advertisers in general.

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