March 30, 2006 | posted by Michael Baxter in Uncategorized |

Here’s the stat that really counts. Back in 2001, in the first year after the dot com crash, online advertising in the UK was worth just £165mn. At the time some talked about the Internet as if it was yesterday’s hot story. Clichés were bandied about such as the “Internet has a great future behind it.” Now forward wind five years, and take a look at 2005. According to the Interactive Advertising Bureau, in the year just ended, UK Internet advertising was worth £1,366mn,and grew by 65% on last year. And the industry is set to see continued growth in 2006, with the Interactive Advertising Bureau’s chief executive, Guy Phillipson, saying that the sales could hit the £2bn mark, and that says Mr Phillipson “would make online bigger than national press.”

Internet advertising now makes up 7.8% of the entire UK advertising cake, and so rapid was its growth that the industry as a whole expanded last year, and that despite falls in the other main advertising areas

To put the figures in perspective, last year national newspaper advertising was worth £1.9bn, radio advertising £614mn, and consumer magazines £827mn.

Recruitment was the top sector with the online, representing 22.1% of the total market. Finance and Automotive followed accounting for 17.4% and 12.4% respectively. But it was the Entertainment sector, driven by broadband powered video-streaming and sophisticated rich media that recorded the most significant growth in the second half of last year - worth 10.2% of spend in 2005 compared to 6.2% in 2004.

2005 saw a big pick up in brand advertising, but it still lags behind search-based sponsorship. Apparently, online brand advertising is a lot more successful in the US.

One of the big differences between online and traditional paper media is that the barriers to entry are much lower in the online field. So while advertising revenues increase, the variety of online media seems to go up with it.

Sources
2005 online advertising spend rockets towards £1.4 billion
IAB
Online adspend rockets 65% and heads for £2bn mark
Brand Republic
Online Ad Spend Skyrockets
ClickZNews