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Business – Web beats TV to biggest advertising share

Tim Bradshaw, Digital Media Correspondent

Published: September 30 2009 03:00 | Last updated: September 30 2009 03:00

The internet has overtaken television to become the UK’s largest advertising medium, according to a report by PwC for the Internet Advertising Bureau.

The UK is the first large media market to see such a shift.

Spending on online advertising grew 4.6 per cent in the first half of 2009 compared with the same period last year to reach £1.75bn, driven largely by searchengine advertising.

By contrast, overall advertising spending fell 16.6 per cent. As a result, online’s share of the total grew from 18.7 per cent in the first half of last year to 23.5 per cent, ahead of TV’s 21.9 per cent.

Online overtook news-paper advertising sales income in 2006.

The web’s rise as an advertising medium has slowed substantially from its 17 per cent growth rate last year. But the recession means online has overtaken television spending six months sooner than expected, said Guy Phillipson, IAB chief executive.

Online advertisers are able to discern more precisely than from other media how many people have seen a commercial and whether they have made an immediate purchase. This “accountability” had helped online increase its market share, said Mr Phillipson.

Mr Phillipson said online could reach a 30 per cent market share within a few years, a threshold no single medium has crossed before.

“It’s a point in history,” said Peter Scott, chairman and joint chief executive of Engine Group , one of the UK’s largest independent advertising agency groups. “It marks a point when things aren’t going to go back to the way they were. The change of technology and media fragmentation is not going to stop.”

However, Eva BergWinters of PwC, who compiled the research, said online’s lead “could reverse” in the short term if TV had a revival after the downturn.

“The structural shift towards online has been accelerated in the recession,” she added. “Eventually I would expect online to be ahead of TV. It will become hard to tell the difference between the two.”

To boost the internet’s accountability to advertisers, Nielsen, the market research group, has this week been appointed to create an industry-standard audience measurement tool for the web.

Thinkbox, the marketing body for commercial television broadcasters, challenged the IAB report, saying gathering the components of online advertising into a single figure was an unfair comparison.

“Online marketing spend is made up of many things including e-mail, classified ads, display ads . . . and, overwhelmingly, search marketing,” said Lindsey Clay, Thinkbox’s marketing director. “They should be judged individually.”

The IAB countered that online advertising was “all on the same [internet protocol] platform”, just as newspaper display and classified adverts were combined to give a total figure for press advertising.

Search engine advertising, which makes up 60 per cent of the online adverts market and is dominated by Google in the UK, grew by 6.8 per cent year-on-year to £1.05bn. Classified advertising shifted from print to the web much faster than expected in the downturn, with 10.6 per cent online growth to £385m. But display, such as banner adverts, fell 5.2 per cent to £316.5m.

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September 30, 2009 - Posted by | Uncategorized |

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