Above, we said how technology provides the hope for the end of the current economic crisis. Then, right on cue, comes the Interactive Advertising Bureau, in conjunction with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre with their latest report on Internet advertising.
And while doom and gloom hit the property market, Internet advertising continues its run of extraordinary growth.
Online advertising in the UK has grown from being the smallest market sector in 2003 to the third-largest in 2007, with a new high of £2,812.6 millions. This represents a 38 per cent year-on-year like-for-like increase, taking the medium to a market share of 15.3 per cent (up from 11.4 per cent in 2006). Internet advertising spend in 2007 exceeded the most-generous forecasts and is now larger than press classifieds and regional newspapers.
“In just three years,” says the IAB, “online advertising spend has increased by £2 billion. In a relatively buoyant UK advertising market, the Internet was the biggest driver of growth – accelerating nine times faster than the entire advertising sector, which experienced 4.3 per cent growth to reach £18.4 billion.”
“Total Internet display advertising spend saw a 31 per cent year-on-year increase,” says the IAB, and while paid-for search marketing is maturing, it is “not slowing, as marketers become more sophisticated in their use of the medium. In 2007 search grew by 39 per cent in line with overall growth, to £1.6 billion.”
The IAB says, “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 recruitment sector continued to lead the market with 25.7 per cent market share, up 0.9 points on the second half of 2006. Second was Automotive with 11.9 per cent, while Technology (10.4 per cent) overtook Finance (10 per cent) for the first time, to take third place.
As we have argued many times before, in the world of online retail, position on the Internet takes on a similar level of importance as position on the High Street for a traditional retailer.
The money then that an online retailer spends on online advertising, does not just come out of advertising budget, it should come out of the money that would otherwise have been set aside for rent.
For that reason, we think online advertising has lots more growth to come.
Does anyone think it is it a tad ironic, that the very thing that created the last major crisis – the dotcom crash, is the very thing that is performing well now; while house prices, that soared earlier this decade when tech shares were taking a beating, are now taking the hit?
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