Web overtakes TV as most popular UK ad medium: IAB

Reuters News
Posted: Oct 04, 2011 1:44 PM
Web overtakes TV as most popular UK ad medium: IAB

By Kate Holton

LONDON (Reuters) - Brands spent more money advertising on the Internet in Britain than they did on TV for the first time in the first half of 2011, as companies moved online to reach the millions of Britons using social networks and watching videos.

The bi-annual report by the Internet Advertising Bureau, PwC and marketing group WARC said advertising online in Britain rose 13.5 percent in the first six months to 2.26 billion pounds ($3.48 billion), giving it a record high market share of 27 percent.

TV had a market share of 26 percent, the report said.

The medium was boosted by 100 percent growth in online video ads, strong spending by companies in the fast moving consumer goods sector (FMCG), and campaigns designed for social media.

Within the Internet category, 58 percent of revenues came from search advertising, with 23 percent on display ads and 17 percent on classified ads.

Search advertising grew 12.6 percent, while display advertising grew by 18.5 percent, boosted by new formats and demand for online video adverts.

"The spectacular growth of video and social media powering brand display is key to online achieving a record share of 27 percent," IAB Chief Executive Guy Phillipson said.

"FMCG advertisers were relatively late to the party, but now firmly established as the second highest-spending category, they clearly have all the proof they need to invest in line with the medium's share, and enjoy healthy returns from cross-media campaigns."

The IAB said spending online was led by financial clients in display ads but that ad spend from consumer goods groups was now growing the fastest.

The strong growth for online advertising fitted with a revised global advertising forecast released by ZenithOptimedia on Monday, which put Internet ad growth at a faster rate than any other medium, at an average of 14.6 percent a year between 2010 and 2013.

"Overall, we predict Internet advertising will increase its share of the ad market from 14.4 percent in 2010 to 18.9 percent in 2013, when it will overtake newspapers to become the world's second-largest medium," Zenith said.

Overall, ZenithOptimedia cut its forecasts for global ad expenditure growth in 2011 to 3.6 percent, a 0.5 percentage points cut, as companies trimmed budgets in the face of growing concerns about the strength of the global economy. ($1 = 0.649 British Pounds)

(Editing by Jane Merriman)