Reading Time | 2 mins

Internet takes biggest slice of UK advertising spend

Share this article

The UK has become the first major economy in the world in which more money is spent on internet advertising than on television commercials.

Figures from the Internet Advertising Bureau showed that a record £1.75 billion was invested in online marketing in the first two quarters of the year.

This represents a 4.6 per cent year-on-year rise, with the internet now accounting for 23.5 per cent of total advertising spend in the UK. Television claimed 21.9 per cent of overall marketing expenditure.

Forecasts suggested that internet advertising spend would surpass television by the end of 2009, but the recession has speeded up the rate at which online budgets have caught and exceeded those of television.

The IAB study revealed that TV advertising slid by 17 per cent year-on-year to £1.6 billion.

A breakdown of the data indicated that online search advertising was up by 6.8 per cent compared with a year ago, while internet classified ads rose by 10.6 per cent.

However, display advertising, such as banner ads, saw a fall in expenditure, down 5.2 per cent.

And the recession has had a more general effect even on internet budgets. The first three months of 2009 registered a spend of £902 million on online marketing, an increase of 8.6 per cent on the same period a year ago; but the second quarter only managed growth of 1.1 per cent.

Despite the difficulties of the last three months, Guy Phillipson, the chief executive of the IAB, believes there remains a lot of potential for yet more expansion in the online ad market.

He said: “We could absolutely see it grow to being a 30 per cent medium to go past £4 billion to even £5 billion annually. Online display advertising has plenty of room for growth.”

TV marketers, though, questioned the IAB’s figures. Thinkbox, the marketing body for the main UK commercial television broadcasters, responded by saying that the study treated the internet as if it were a single medium and failed to compare like with like.

Lindsey Clay, the marketing director at Thinkbox, commented: “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.

“The internet is a fantastic technology and home to many different marketing activities that do different things. As such, it is interesting but meaningless to sweep all the money spent on every aspect of online marketing into one big figure and celebrate it.”