UK Online Advertising Overtakes Direct Mail with 15% Ad Spend Share

Internet advertising has again buoyed the UK advertising industry with above-expectation 41.3 percent year-on-year growth in the first half of 2007, achieving a half-year high of £1,334.3 million - compared with £917.2 million a year ago, according to recently released data.

That growth lifted online advertising’s market share to 14.7 percent, overtaking direct mail, which has a market share of 11.8 percent, writes MarketingCharts.

The results of the biannual internet advertising spend study commissioned by the Internet Advertising Bureau - UK (IAB), in association with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC), point to online advertising expenditure reaching a potential new high of £2.75 billion by the end of 2007.

The total UK advertising market grew 3.1 percent during the first half of the year to £9.1 billion; however, without online’s contribution, UK media expenditure would have fallen 1.9 percent (or £147 million), IAB UK said.

The following are among the findings of the IAB/PwC/WARC report:

• Classified advertising is the latest online success story, growing 72 percent year on year to £277.7 million with a share of 20.8 percent 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 percent to £287 million and a share of 21.5 percent. 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 search was 44 percent up year on year to £762.3 million - a share of 57.1 percent 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 percent of these resulted in a click through to a website.

MarketingCharts has more data on major categories and the key drivers of online advertising growth in the UK.