Online advertising growth fueled by double-digit growth in search and display
Video grows 100% as advertisers ramp up their online spend
A surge in FMCG advertising and a triple-digit increase in online video helped fuel a 13.5% like for like growth in UK internet advertising expenditure, and a half-year 2011 high of £2.26 billion.
Internet spend has surpassed forecasts to reach a new market share of 27%, with a quarter of a billion pounds more spent on internet advertising in the first half of 2011 compared to the same period in 2010.
The figures are collated bi-annually by the Internet Advertising Bureau (IAB), the trade body for digital advertising, in conjunction with PwC and WARC.
Display accounts for nearly a quarter of spend as search and classified still grow
Boosted by sophisticated new formats and 100% growth of online video, display advertising grew by 18.5% year on year on a like for like basis to £510 million, representing a 23% share of online spend in the first half of 2011 (£440 million and 22% share in H1 2010).
A combination of direct response and an increased number of social media and brand campaigns delivered this growth.
Although banners and embedded formats still dominate online display (73% share), video doubled in size year on year to £45 million, giving it a 9% share of online display. This is due to a significant increase in advertisers using video to deliver brand messages.
Paid-for search marketing continued to thrive as advertisers recognise its transparent and measurable benefits during these budget-pressured times. Year on year, search increased 12.6% to £1,313 million, representing a share of 58% of online advertising.
Lead generation, an increasingly important form of performance-based marketing where advertisers pay per sales lead rather than a click through or by an advertisement served, grew by 20% to £26 million.
Guy Phillipson, chief executive of the Internet Advertising Bureau, said: “The spectacular growth of video and social media powering brand display is key to online achieving a record share of 27%.
FMCG advertisers were relatively late to the party, but now firmly established as the second highest-spending category, they clearly have all the proof they need to invest in line with the medium’s share, and enjoy healthy returns from cross-media campaigns.
“With direct response advertising also thriving in the current climate, online offers a potent combination for all marketers, and the indications are that double-digit growth will continue in the UK.”
Anna Bartz, strategy manager at PwC, said: “Advertisers are benefiting from sophisticated new online advertising tools across both search and display. In difficult economic times, the transparency and measurability of online display and search advertising is helping marketers spend more wisely and get what they pay for.”
Key drivers for growth
Online audience grows
In June 2011 the UK’s active online user base had grown to 39.5 million, up from 38.4 million in June 2010. Source: UKOM/Nielsen.
Online population watching more and more video online
In June 2011, 26 million people watched 2.3 billion videos for a total of 6.4 billion minutes. Per person that equates to an average of 87 videos viewed for an average of 4.1 hours per month. Source: UKOM/Nielsen Video Census, June 2011.
Faster broadband drives video advertising
Over a quarter of users have super-fast broadband – 28% access online with a connection speed of over 8Mb. 46% of at-home UK internet users access the internet with a connection speed of between 2Mb and 8Mb. Source: UKOM/Nielsen, May 2011.
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: UKOM/Nielsen, June 2011.
Contact David Jerram to discover how you can capitalize in the explosive growth in online advertising, including search, display, video and direct marketing.
