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UK online ad market set to top radio
Britain rebounds sharply from dot-com bust

By Reuters

Published: Wednesday 21 July 2004

Britain's internet advertising market topped £350m in 2003, putting the industry solidly on track to surpass commercial radio within the next three years, an industry trade group says.

The demand for corporate-sponsored search listings and a surge in new users attracted a host of new advertisers to the internet and pushed ad revenues up 80 per cent year-on-year, the Internet Advertising Bureau (IAB) UK said on Tuesday in an annual report audited by PricewaterhouseCoopers.

The growth figure is higher than the trade group's estimate in February when it said UK online ad market would grow at around 50 per cent in 2003.

Despite the improved picture, the IAB UK did not change its forecast for 2007, when online ad revenues are expected to top £600m, overtaking commercial radio.

Britain's online ad market, considered the largest in Europe, has hit new records in each of the past six quarters, said IAB UK Chief Executive Danny Meadows-Klue.

"The online [sector] now is so far ahead of where we were at the height of the dot-com boom," said Meadows-Klue.

The bursting of the dot-com bubble in 2000 had a devastating effect on the internet industry, driving scores of advertiser-dependent businesses into oblivion.

In the past two years, the larger markets of the United States and Britain have rebounded, boosted by the popularity of ad-sponsored search links found on search engines such as Google and Yahoo and favoured by advertisers of all sizes.

While up-to-date figures were not available for the rest of Western Europe, online advertising has been growing at a steady clip in France and Germany too, according to IAB Europe.

On Monday, media buying and planning agency Zenith Optimedia, a unit of France's Publicis, said it expects global ad spending level to rise by 5.7 per cent in 2004 as Europe's overall ad market shows continued signs of recovery.