UK ONLINE AD REVENUES PREDICTED TO OVERTAKE TV IN 2009

Data sourced from BBC Online (UK); additional content by WARC staff, 09 April 2008

LONDON: The Internet Advertising Bureau's hype machine accelerated to warp speed on Tuesday, its latest report suggesting that UK internet advertising revenues will overtake television some time next year.

Rah-rah aside, this is not entirely improbable given the ongoing decline of TV audiences and the rise and rise of internet usage, accelerated in the UK by the near-universality of broadband, faster download speeds, and the plummeting price of laptops.

Moreover, figures recently published by the UK Advertising Association also suggest that online ad growth – if maintained –  could propel the medium to the top of the pile next year.

According to data produced for the IAB by PricewaterhouseCoopers, online grew 38% overall in 2007 to £2.8 billion ($5.56bn; €3.54bn), accounting for 15.3% of the nation's adspend and making it the third largest medium after press display and TV

The sterling value of all online formats continued to grow with display ad revenues, including banners and video, rising 31% last year.

Comments IAB UK chief executive Guy Phillipson: "To grow 38% from £2bn [in 2006] to £2.8bn is a very powerful performance."

There are a number of additional factors contributing to the rise and rise of web advertising, among them  the growing appeal of social networking sites and catch-up TV, such as that offered by the BBCiPlayer.

Classified web advertising saw a 54% year-on-year leap to  £585.3m in 2007, recruitment firms leading the pack with 25.7% market share. Automotive ads followed with 11.9%, and technology surpassed finance for the first time to seize third place.

Readers between-the-lines will note the IAB report's comment that the market for paid-for search ads is "not slowing but maturing" – whatever that may mean. It also suggests that marketers have become more sophisticated in the way they use the medium.

"Brands are now using search more intelligently, getting a greater return on investment through 'key phrases' and more accurate targeting that reflects consumer behaviour," the report concludes.

However, IAB offers no data on RoI to support that contention.