UK online ad spend to surpass TV
Online advertising expenditure in the UK hit £2.8 billion in 2007, according to trade body the Internet Advertising Bureau (IAB).
Total year on year spend was up 38% from 2006 and the IAB predict that online ad revenues will go on to exceed those of television in 2009.
Explaining the increases, the IAB, PriceWaterhouseCoopers and the World Advertising Research Centre said that the rises were driven by a growing internet population and an increased demand for on-demand internet TV services, such as the BBC iPlayer.
“With broadband speeds on the up and consumers spending more time on more sites, the outlook for online advertising is rosy,” commented IAB chief executive Guy Phillipson, adding that by 2009 it would be the most important advertising medium in the UK.
The growth of online advertising has actually slowed from recent years - 2005 saw growth of 66% and 2006 41% - though it continues to easily outstrip other advertising mediums.
“In a relatively buoyant UK advertising market, the internet was the biggest driver of growth; accelarating nine times faster than the entire advertising sector, which experienced 4.3% growth,” said the IAB report.
The reduced rate of growth in the online advertising sector is seen as a sign that the relatively new medium is beginning to mature, with advertisers now focusing more keenly on maximising their return on investment through more accurate customer targeting.
Online advertising, already a hugely important revenue stream for the large search providers such as Google, Yahoo and Microsoft, is recognised as key to future monetizing of search market share. Platforms such as social networking site Facebook, which allow advertisers to target users by demographics including age, gender and interests, are also increasing the opportunities online branding.
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