Do you remember the day the internet died? It’s like the words to that Don Mclean song, but, just as music turned out not to have died after all, it appears the internet was just pausing for breath, before it embarked on the most extraordinary growth story.
Back in 2001, internet advertising in the UK was worth £165 million, but according to data released yesterday, in 2006 it soared to just over £2 billion. Or so says the latest report from the Interactive Advertising Bureau and PricewaterhouseCoopers.
In the process it overtook advertising in national newspapers, which was worth just £1.9 billion, to become the UK’s second largest advertising medium. The growth has increased the internet’s share of all advertising revenues to 11.4 percent, up from 7.8 percent in 2005, and it is now half the size of the TV advertising market - which experienced a fall of 4.7 percent in 2006 to £3.9 billion.
In fact, internet advertising aside, the UK advertising market reduced in size last year by £466.1 million year-on-year, a 2.9 percent decline. However, with the increase in online advertising spend, the entire market grew by 1.1 percent.
By the second half of the year, the ‘net was doing even better, when expenditure topped £1.098 billion - a 12.4 percent share of total UK advertising. According to ZenithOptimedia, the UK now leads the world for share of advertising spend online as the global average is currently 5.8 percent.
Of late, the real star in the internet advertising world has been search engines, and 2006 was no exception, seeing 52 percent growth to £1.2 billion or a 57.8 percent share
But the year also saw classified advertising grow by 45 percent to £379 million, at a time when traditional classified advertising declined by 7.8 percent year-on-year.
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