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Who's king of advertising? Web set to overtake TV
With UK showing online ads the biggest love

By Reuters

Published: Wednesday 09 April 2008

The UK has the most developed online-advertising market in the world. According to the report by the Internet Advertising Bureau (IAB), PricewaterhouseCoopers and the World Advertising Research Center, the UK online-ad market was worth £2.8bn in 2007.

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The report said last year's 38 per cent online-ad growth was driven by the rising number of people online, the introduction of cheap laptops and the growing popularity of catch-up TV on the internet through services such as Channel 4's 4oD.

IAB chief executive Guy Phillipson said in a statement: "With broadband speeds on the up and consumers spending more time on more sites, the outlook for online advertising is rosy. In fact, we expect it to overtake TV in 2009, when it will become the UK's biggest medium."

The report said the internet was the biggest driver of overall advertising growth in 2007, with the entire sector in the UK experiencing 4.3 per cent growth, to £18.4bn.

Online-ad spend had a market share of 15.3 per cent, up from 11.4 per cent in 2006, but behind display press advertising, at 19.9 per cent, and TV, at 21.8 per cent.

Display online advertising, such as banners and video, grew 31 per cent, while paid-for search marketing was "maturing but not slowing", as marketers and brands learned to secure a greater return on their investment through "key phrases" and accurate targeting.

Advertising spend on search grew 39 per cent, in line with overall growth, to £1.6bn, while its market share remained largely the same, at almost 58 per cent. Classified advertising showed 54 per cent year-on-year growth.

Among the different sectors, recruitment led the market with 25.7 per cent market share, ahead of the automotive sector and technology, which overtook finance for the first time.