Internet becomes largest ad sector in UK, overtaking television

Posted by Nestor Bailly on September 30, 2009 at 10:36 AM

The IABUK reports internet ad spending grew 4.6% in the first half of 2009, totaling £1.79 billion and overtaking television for the first time. Surprising news given the recent downturn in advertising across all sectors and Huffington's CEO announcing that CPM ad revenue is nearing zero.

The internet now contains 23.5% of all advertising spending while television comes in at 21.9%, making the UK the first major economy where the internet has become the leading advertising sector. While this is in line with the general trend over the past years of the internet's increasing share in the advertising market, this growth is still in the context of a general downturn in media advertising of 16.6% since last year.

More specifically, online classified adverts grew by 10.6% to comprise 22% of all internet ad spending, while online display ads fell by 5.2% to 18%. However, within the display ad sector, video advert spending has grown by nearly 300% to £12 million.

Guy Phillipson, the chief executive of the IAB, reckoned that there is still significant growth potential left in the internet ad market: "We could absolutely see it grow to being a 30% medium [of share of ad spent], to go past £4bn to even £5bn annually," he said. "Online display advertising has plenty of room for growth."

Upon close inspection, however, it is clear that the general rise of the internet in the advertising market has been marred by the recession. First quarter growth represented an 8.6% rise from last year, but a Q2 crash in spending marked only a 1.1% increase from last year.

The IAB study also breaks down by industry category, identifying top spenders are and investment flux across sectors. The results show that Technology is the biggest spender, accounting for 19.1% of the market, followed by Telecoms (13.3% rising from 9.7% the previous year) and Finance (13.2% up from 11.9%). Entertainment and Media was fourth with 11.8%, while Consumer Goods saw significant growth up to 8.1% as marketers steadily increased digital budgets.

Sources: IABUK

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