UK Internet/Digital Advertising shows another year of growth

Online/digital advertising expenditure in UK showed a 4.2% increase to £3.5 billion in 2009 bucking the trend seen in other areas of the advertising industry.

Search advertising exceeded £2 billion with video ads showing the greatest growth. The figures for online grew during 2009 despite an overall decline in the total UK advertising spend.

Is this the death knell for traditional advertising?

The bi-annual IAB and PricewaterhouseCoopers LLP study of advertising spend show that, since the dot com bubble burst in 2001, advertising expenditure online has recorded increasing growth each year during the last decade.

UK online advertising has shot up by 2,200% from £153 million in 2000 to £3.5 billion in 2009.

Accountability, reach & measurement

Retail and Consumer Goods segments pushed ahead as the main two areas of spend in online display advertising. The medium’s accountability, market reach, it’s tested and proven engagement strengths, all encouraged marketers to increase their digital advertising budget allocations during 2009.

In the difficult trading environment seem during 2009 the ability to measure ROI and justify an increase, or indeed any spend, gives online, digital marketing and advertising an edge over more traditional media.

Key drivers contributing to growth (as reported by study)

  • Advertiser confidence
    According to the latest IPA/BDO Bellwether Report optimism is returning to UK marketing companies and budgets are set to rise in 2010, despite the ninth consecutive period of cuts to total budgets in Q4 2009. The IPA survey panel, made up of marketers at 300 leading companies, collectively presented the most upbeat financial outlook for their industries since the question was first asked in the second quarter of 2005 (source: IPA Bellwether report, January 2009).
  • More people online
    According to data from the UK Online Measurement Company (UKOM) and Nielsen, the UK’s active online user base had grown from 35.5 million in February 2009 to 39.7 million in February 2010 (representing an increase of 4.4 million active internet users in just 12 months.)
  • Faster broadband drives video advertising
    92% of the UK online population now has broadband, with 63% enjoying speeds of over 2MB. Internet users’ expectations of the digital experience are higher than ever and advertisers have met these demands with increasingly dynamic video and rich media executions.
  • Social media fever grips Britons
    Facebook now accounts for 20% of all time spent online in the UK, making online sessions more immersive, whilst offering huge opportunities for brands to exploit the social nature of the web. Social media has injected even more life into online usage making it the perfect environment for entertaining and engaging ads.

Areas of main growth

Paid search (Google Adwords, Microsoft AdCenter etc) continued to show growth (9.5%, £2.15 billion) representing 60.7% of all online ad spend in 2009 compared with 59.3% in 2008.

Although online display advertising showed an overal decline of 4.4% over the year it did pick up in the second half with video advertising showing impressive growth with a 140% increase year-on-year.

Clearly the newer technologies, such as video, interactive webinars etc, fuelled by higher and more available broadband speeds will continue to grow and the main areas to watch during 2010.

Make sure your are taking advantage of this digital advertising explosion and getting your fair share. Whether a national, local, large or small advertiser WebMedia can help and assist you in getting the most out of your online business activities.

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