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Lucy Griffiths

Crunch-Proof – The Rise of Internet Advertising in 2008

14th Oct 2008 News, Industry News 2 minutes to read

The increasingly devastating financial condition known as the Credit Crunch has hit the advertising industry hard. The traditional advertising media of television, radio and newspapers are all recoiling from the strong fall in sales figures for 2008.  Projections for traditional modes of advertising in 2009 are also depressingly glum.

Whilst traditional forms of advertising maintain a failing fingertip grasp on the market, Internet advertising is only percentage points away from surpassing all of these advertising methods in terms of annual market spend.

Steady Growth

Even as far back as 2001, media magnate Rupert Murdoch’s all-powerful ‘NewsCorp’ announced a massive slump in revenue from advertising.  At the same time, although weakened by the Dot Com Crash, Internet advertising revenue continued to grow.  Between 2003 and 2007, Internet advertising transformed itself from a niche in the market, to the third largest advertising source.

Since then things haven’t got much better for traditional advertisers. By 2006, Internet advertising in the UK had convincingly surpassed newspaper ads. In 2007, television giant ITV saw pre-tax advertising profits fall by 39%, as the market already recognised the value for money represented by online options. Reuters, the international news agency reports that during 2008, online ads will overtake television advertising too.

Newspaper advertising has also taken a heavy beating from the Credit Crunch.  Peter Williams, finance director at DMGT – the publisher that owns the Daily Mail, confessed that during the third quarter of 2008, advertising revenue had fallen and “we’re not relying on any pick-up in the near future”.   Businesses recognise the immediate and powerful results obtained by Internet advertising and have deserted newspaper advertising in droves.

Conversely, during this period of economic crisis, Internet advertising continues to grow. Whilst all advertising growth is clearly slowing down, predictions for online advertising in late 2008 and 2009 show a steady growth, revealing a trend towards increasing confidence in the effectiveness of Internet advertising and the valuable ROI it represents.

Internet Advertising Growing in UK

In 2008, Internet advertising presented a growth of 21% whilst traditional media fell.  Internet advertising within the United Kingdom represents 19% of the total share of advertising revenue.  It has been predicted that by 2011, the total online advertising spend will be £4.5 billion in the UK alone; this will be 30% of the UK’s total advertising share.

In the UK, paid search leads the way in web advertising sales with a growth of 28% across 2008.   Natural search hasn’t been slacking either with a 68% increase in growth in last twelve months.  Obviously this supports the message that a blended approach to online advertising is the best way to secure your own share of the market.

Positive Forecast

The Credit Crunch may have affected most of the global economy, with traditional advertising channels suffering badly.  However, online marketing and advertising appears to still be growing because it has proved itself as a cost-effective tool that provides crunch-proof results that matter during a difficult time.

If you have anything you’d like to discuss or add, please leave a comment or you can Tweet one of the Koozai team at @Koozai. For more information about our services, please contact us today.

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