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James Perrin

UK Online Advertising Spend Exceeds £4 Billion

29th Mar 2011 News, Industry News, Social Media, Social Media, Video Marketing 2 minutes to read

The digital market share for advertising spend in the UK has hit a new high, surpassing £4 billion and accounting for a quarter of total advertising spend according to recent figures.

Research conducted by the Internet Advertising Bureau (IAB) and accountants at PricewaterhouseCoopers (PwC) have revealed the UK advertising market grew year on year by 12.8% to 2010, topping the £4 billion mark.

Breakdown of online advertising spend

Looking further into the areas of digital advertising spend, there are some pretty interesting findings. Display advertising for social media websites are hitting all the headlines, whilst search engine advertising remaining dominant despite only seeing slight growth.

Total display advertising spend on social network sites grew by 27.5% to £945 million, meaning this now accounts for 23% of total online advertising spend. The rise in display advertising for social media websites such as Facebook and Twitter helped overall online advertising grow dramatically last year. Figures indicate that social networking sites occupy 25% of the UK’s internet users’ online time.  Therefore, it appears major brands are taking advantage of this trend by turning to these marketing platforms for effective targeted advertising.

The 23% of online advertising spend that display advertising achieves is dwarfed in comparison to paid search, on platforms such as Google and Bing.  Search engine advertising’s year on year growth was at 8% and remains the biggest earner within online advertising and accounts for 57% of total online spend. However to put this into perspective, this marks a slight sip when compared with the 61% seen last year; possibly meaning that advertisers are turning to social media display advertising or that growth elsewhere is simply levelling out the playing field.

Notable achievements are also seen with online video advertising which nearly doubled during this time. £54 million was spent on advertising before, during and after online videos, a year on year growth of 91%. Furthermore, mobile advertising doubled to £83 million, thanks to the growing popularity of mobile devices such as Smartphones and Tablets.
Digital sector growth

The digital sector now accounts for a quarter of total advertising spend (£16.6 billion) in the UK. The increase can be mainly attributed to display advertising on social media, and truly reflects the current online trends. As we reported earlier in the year that Facebook overhauledl Google as the most popular site of 2010, which indicates a certain movement towards the social networking site – for users at least. Whilst those figures were applicable to the US market, these UK advertising figures reveal that businesses, mainly within the consumer goods, finance and entertainment sectors, are hedging their bets on the rising social media platforms.

The news comes at a time when advertising spend for television and print based media has slumped once again. Figures have shown shoots of recovery for television based advertising in 2010, with the growth in online advertising coming largely at the expense of print media. Revenues continue to fall for magazines and regional newspapers, with most sources turning to their websites to generate increased revenue instead – further growing the digital sector advertising spend.

With future broadband speeds becoming faster, new formats are becoming increasingly attractive for businesses. Social media is still in its infancy and is constantly evolving, making branding and marketing far easier and appealing. The IAB are expecting that online spending shall continue to grow – with the current advertising figures and future online prospects it’s hard to disagree.

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