Online advertising nears £2 billion

Online advertising in the UK was up 10 per cent in the first half of 2010 to £1.97 billion.

The increase was driven in large part by a surge in video and social network advertising, according to the bi-annual online advertising expenditure study from the Internet Advertising Bureau (IAB), which was produced in partnership with PricewaterhouseCoopers (PwC).

Online advertising now has a market share of 24.3 per cent of the total UK advertising spend. The wider advertising industry also saw a recovery in the first half of the year, with total UK advertising spending up by 6.3 per cent to £8.1 billion.

Guy Phillipson, chief executive of the IAB, comments: ‘The return to double digit growth in UK online advertising is characterised by increased investment by major brands, particularly in FMCG [fast moving consumer goods] and entertainment. The effectiveness of social and video ads for classic brand building is reflected in these formats enjoying exponential growth.’

The highest spending sector was entertainment and media, which accounted for 14.4 per cent of total online advertising spend in the UK, followed by finance and FMCG.

Despite the continued difficulty in the sector, retail saw increased online advertising from 7.1 per cent of total spend in the first half of 2009 to 8.4 per cent in 2010.
Anna Bartz, strategy manager at PwC, says: ‘These figures reflect a sense of positivity in the advertising industry at a time when many other media in the UK have also displayed signs of a healthy recovery.’

The report also highlights a number of driving factors for the recent growth, including the growing number of online users in the UK and an uptake in the use of devices such as smartphones.

UK internet users are now spending 23 per cent of their time online using social networks and blogs, claims the IAB.

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