Marketers see press ads as old news

Marketers in the UK have for the first time spent more of their advertising budgets on the internet than on the national press.

New industry figures reveal that the market for UK-based internet advertising grew 41.2% over the 12 months of 2006.

This means more than £2bn was spent to engage an audience of 31million adults.

The unprecedented growth in online expenditure is the only reason the UK advertising industry, as a whole, grew last year (by 1.1%).

Advertising through online banners, videos and paid-for search is now more than half the size of television advertising, which is the UK’s single biggest medium.

Investment in the superhighway means online advertising is today at the highest ever market share of all UK advertising, currently standing at a record 12.4 %.

Although an increase was predicted, such runaway growth beats all analysts’ expectations, and surpasses the 5.8 per cent worldwide average share of advertising for the medium, as estimated by Zenith Optimedia.

As a result, the UK now has the highest national share in the world, according to the authors of the figures, the Internet Advertising Bureau, PwC and the World Advertising Research Centre.

Wider adoption of high speed internet connections coupled with the explosion in social networking sites explains why consumers are spending longer periods online.

Their insatiable appetite for user-generated content has opened up new possibilities for marketers to reach new and existing audiences, the authors said.

Advertising in computer games or virtual worlds was cited as growing in popularity over the last 18 months, as was marketers’ use of Web-based video technology.

Using graphics, audio, video or animation has enabled marketers to create rich media adverts, which are having the effect of keeping consumers online for longer.

“These advertisers recognise that…awareness is higher when video ads are employed,” the authors said in a joint statement.

“The increase is more than twice as high when video ads are used compared with the increase in ad awareness across all online display ads.”

Despite this, online display advertising – including banners, skyscrapers and online sponsorships – rose in revenue by 35% year-on-year, to £453million.

The growth of paid-for search ads was sustained, increasing by 52% to £1.1 billion of total online ad spend, meaning it now has a majority share of 57.8%.

Unlike traditional classified advertising, online classified ads were also up 45% to £379million, representing a share of 18.8%.

Record spend on e-advertising was achieved in the second half of last year, as marketers reigned in spending on the national press and “followed their audiences online,” PwC said.

In a statement, the authors said: “with almost all expenditure on traditional media in decline, the upward momentum of the internet reflects a new era in marketing communication and consumer behaviour, which is driven by high-speed broadband take-up and user-generated content.”

Overall, the figures confirm that advertisers are repeating their actions of 2005 by focusing on the internet, but now they are switching “more of their budgets online to build their brands and interact with customers.”

Consumer’s wider use of wireless connections and faster broadband led the authors to predict that the “growth in online advertising in the UK is set to continue unabated.



 

2nd April 2007

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