Net overtakes TV to become biggest ad sector

The milestone marks a watershed for the embattled TV industry, the leading ad medium in the UK for almost half a century. It has taken the internet little more than a decade to become the biggest advertising sector in the UK.

UK advertisers spent £1.75 billion on internet advertising in the six months to the end of June, a 4.6 per cent year-on-year increase, according to a report by the Internet Advertising Bureau and PricewaterhouseCoopers.

To put this in perspective, in 1998, when the IAB first measured internet advertising, just £ 19.4 million was spent online. The internet now accounts for 23.5 per cent of all advertising money spent in the UK, while TV ad spend accounts for 21.9 per cent of marketing budgets. The IAB originally predicted that internet ad spend would overtake TV at the end of 2009; however, the crippling advertising recession accelerated this by six months. TV advertising fell about 17 per cent year on year in the first half, to about £1.6 billion, the report said.

The IAB’s figures show that of the total of £1.75 billion spent on internet advertising, £1.05 billion, was spent on search advertising on websites including Google, up 6.8 per cent year on year.

Online classified advertising grew by 10.6 per cent year on year to £385 million, about 22 per cent of total internet ad spend. But online display advertising, such as banners on websites, fell by 5.2 per cent year on year, to £316.5 million. This was an 18 per cent share of all internet ad spend.

The ray of light within the online display ad sector was the nascent, but rapidly growing, online video advertising sector. The IAB estimated that this sector grew by close to 300 per cent year on year, to almost £12 million.

Thinkbox, the UK TV marketing body, has taken exception to the IAB’s figures, arguing that the internet is now mature and diverse and it is inaccurate to collate all the figures as if it is one single medium. “Online marketing spend is made up of many things, including email, classified ads, display ads (including online TV advertising) and, overwhelmingly, search marketing. They should be judged individually,” said Lindsey Clay, marketing director at Thinkbox.