1 in 4 ads are now on the Internet- IAB

A quarter of all advertising spent is now on the Internet, growing 12.8% in 2010 to reach a new milestone of £4,097m, according to the bi-annual advertising spend study from the Internet Advertising Bureau (IAB) and PwC.


With total UK advertising spend in 2010 valued at £16.6 billion, this takes the internet’s market share to a record high of 25% (23% in 2009), meaning that £1 in every £4 invested by advertisers is spent online.
These findings demonstrate that, despite the recession, online advertising is in rude health. Significantly, marketers are increasingly using online channels to drive their brand building campaigns. Consumer goods and retail advertisers increased their investment in online to become two of the top four big spenders in display, capitalising on the medium’s core strengths of reach and engagement as well as accountability.
Display experiences strong growth with social media and video enjoying big rises
In 2010 the biggest gain was display advertising, thanks to a nearly 200% surge in display advertising in a social media environment (on a like-for-like basis)* and 91% year-on-year (absolute growth) in video formats. Expenditure on pre-, mid- and post-roll video advertising nearly doubled to £54 million (£28 million in 2009). Overall display grew by more than a quarter (27.5%) on a like-for-like basis to a new high of £945.1 million, representing 23% of total online spend (up from 20% in 2009).
Consumer goods remain a top three spender
Consumer goods manufacturers became a top three display spender in the first half of 2010 with 12% share, jumping to 13% in the second half. The top spender in online display is finance with 15.2% share, indicating that as the economy recovers, finance brands are seeing their marketing budgets re-emerge. Finance market share has overtaken entertainment and media, which has dipped slightly to a 14% market share.
Search continues its growth
Paid-search continues to perform strongly with growth of 8% year-on-year on a like-for-like basis to £2,346 million, representing 57% of total online spend (61% in 2009).
Despite pressure on the housing, recruitment and automotive markets, online classified advertising bounced back in 2010 recording 9.7% growth on a like-for-like basis to £751 million – a share of 18% (19% in 2009).
Mobile experiences stellar growth
Mobile advertising has experienced a staggering 116% year on year growth (on a like for like basis), up from 32% in 2009. Advertisers spent £83 million on mobile advertising in 2010, led by the entertainment and media sector, but with encouraging growth from finance, telecoms and consumer goods advertising.
Guy Phillipson, chief executive officer of the IAB, said: “Major brands restored their advertising budgets in 2010 and online was a big winner, breaking through the £4 billion barrier and accounting for a quarter of total UK media spend. The power of online to build brands is clearly reflected in the spectacular growth of display, thanks to the popularity of social media and video formats. And with mobile advertising finally coming of age, marketers are enjoying an incredible array of digital opportunities.”
Anna Bartz, strategy manager at PwC, said: “2010 was an exciting year for online advertising – full year growth figures are strong at 12.8% on a like-for-like basis and some 15% in absolute growth. All formats – display, search and classifieds – contributed, although display showed the strongest recovery. This was driven by video, social media and mobile, channels which build a strong foundation for 2011.”
Key drivers for growth
Media budgets boosted – Total advertising market grew 7.2% as 77 of the top 100 advertisers increased spend, according to Nielsen,
Online audience grows – According to data from the UK Online Measurement Company (UKOM) and Nielsen, by December 2010 the UK’s active online user base had grown to 40.3 million
Faster broadband drives video advertising – Penetration of broadband access in internet homes is now 98% (Source: Kantar Media’s Internet Monitor, December 2010). Forty seven per cent of at home UK internet users access the internet with a connection speed of between 2Mb and 8Mb. Fourteen per cent access online with a connection speed of over 8Mb. (Source: UKOM APS/Netview December 2010)
The UK is still glued to social media–Social networks now account for 25% of the time spent online in the UK. This is reflected in the growth of display advertising spend as brands are able to tap into the social nature of the web.
Source:
www.iabuk.net
www.uk.pwc.com