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Online advertising spend tops £4bn for first time

Online advertising spend tops £4bn for first time

Internet advertising now accounts for a quarter of all ad spend in the UK.

Newly released figures by the Internet Advertising Bureau (IAB) and accountants PWC show that internet ad spend grew by 2.8% in 2010 – three times more than in 2009 – breaking through the £4bn barrier for the first time.

The total online ad spend in 2010 was £4.1bn – up from £3.5bn in 2009. Advertisers spent only slightly more on TV advertising last year – a total of £4.28bn.

The figures give the internet a 25% share of the overall advertising market in the UK, with TV just marginally ahead at 26%. Total advertising spend in the UK in 2010 was £16.6bn.

The biggest growth area last year was display advertising on social networks which grew by nearly 200% – prompted by increasing interest by brands to have a presence on Facebook. Figures by Nielsen show that consumers now spend 25% of their time online browsing social networking sites.

Online video advertising also enjoyed a growth spurt in 2010 – with brands spending a total of £54m on pre and post-roll clips attached to video output.

Search advertising remains the area of online advertising most spent on. In 2010 brands spent £2,346m on search – giving it a total of 57% of overall market share.

Guy Phillipson, chief executive officer of the IAB, said, “Major brands restored their advertising budgets in 2010 and online was a big winner, breaking through the £4 billion barrier and accounting for a quarter of total UK media spend.

“The power of online to build brands is clearly reflected in the spectacular growth of display, thanks to the popularity of social media and video formats. And with mobile advertising finally coming of age, marketers are enjoying an incredible array of digital opportunities.”

Anna Bartz, strategy manager at PwC, added, “2010 was an exciting year for online advertising – full year growth figures are strong at 12.8% on a like-for-like basis and some 15% in absolute growth. All formats – display, search and classifieds – contributed, although display showed the strongest recovery.

"This was driven by video, social media and mobile, channels which build a strong foundation for 2011.”

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