UK advertising spend on the web is on course to reach an all time high by the end of this year, it is being predicted.
The results of the biannual internet advertising spend study commissioned by the Internet Advertising Bureau (IAB), the UK online advertising trade body, show that online advertising expenditure potentially reaching a record £2.75 billion. Due to higher than expected growth of 41 per cent in the first of 2007, half yearly online marketing spend topped £1.3 billion for the first time, a 15 per cent market share.
“The online market is developing at an astounding rate and once again we see exceptional growth and a significant increase in market share. Ninety per cent of internet users are on broadband now and nearly 40 per cent are using wireless. We’re also seeing women and the over 50s spending far more time online, which makes the internet a very attractive medium to a broader set of advertisers,” comments Guy Phillipson, chief executive, IAB
The total UK advertising market grew by 3.1% during the first half of the year to £9.1 billion. However without online’s contribution, UK media expenditure would have fallen by 1.9% (or £147 million). Once again the internet has propped up the UK advertising economy and remains the fastest-growing advertising medium. The new results see online overtake the size of the direct mail sector, which has a market share of 11.8%.
Classified advertising is the latest online success story, growing by 72% year on year to £277.7 million with a share of 20.8% of all internet advertising spend. Online classifieds in the recruitment, automotive and property sectors are shaking-up the print industry, with marketing budgets switching at a steady rate in response to the demands of the internet user.
Internet display advertising (including banners, skyscrapers and rich media formats) climbed 33% to £287 million and a share of 21.5%. Nine out of ten online households in the UK are now on broadband, and marketers in all sectors are targeting consumers with increasingly creative rich media and video advertisements.
Paid-for search (search engine listings that advertisers pay for when a consumer clicks through to their site) was 44% up year-on-year to £762.3 million – a share of 57.1% of the online total. Growth is attributed to at least half of all ecommerce transactions (£32 billion in 2006) starting with a search. In July 2007 internet users carried out 1.4 billion search queries and over 80% of these resulted in a click through to a website. Advertisers recognise that search plays a valuable role in building brands, selling products and creating a competitive advantage online.
The top five categories remain the same as in 2006 but automotive has overtaken finance with a 12.5% share and is very much the star performer. From brand-building display ads for marques and models, to email building relationships, through to search aiding research and price comparison, and ultimately classifieds helping consumers find what they want, the automotive industry utilises every online format to complete a customer journey.
Recruitment leads with 24.7% of share up 5.3 points with finance down 3.9 points to 11.7%. Consumer goods made steady progress, increasing by 0.7 points to 5.3%, while retail remained static at around 3.1% of all online advertising spend.
