14 DAY TRIAL // Despite old media's best attempts to have you believe otherwise, the world is changing and business models need to change with it. Recent data from the UK shows that Internet advertising spending has passed TV spending for the first time becoming the single biggest ad market sector. This is the first time online advertising takes the leading role in the ad market in any developed country and likely anywhere in the world and marks a trend that will only accelerate in the future.
Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PWC) data shows that online advertising spending rose 4.6 percent in the first six months of the year reaching £1.75 billion, or $2.78 billion, in the UK representing a 23.5 percent market share. When the IAB first started measuring Internet advertising in 1998 spending was at £19.4 million. The growth, coupled with the big drop in TV spending, which fell 16.1 percent to reach £1.64 billion, or $2.6 billion, and a 21.9 percent market share, put online spending ahead of TV and ahead of any other advertising sector.
Of the online advertising budget, 60 percent, or £1.05 billion, was spent on search advertising with Google taking the bulk of it as the company enjoys an even bigger market share in the UK than in the US or elsewhere in the world. The growth for the segment was 6.8 percent year over year. Classifieds saw the biggest growth with 10.6 percent year over year to reach about 22 percent of the entire online ad spending. Display ads on the other hand dropped 5.2 percent.
Previous expectations were that online advertising would grab the biggest market share by the end of the year but the tanking ad market led to this happening six months earlier. In fact, overall the advertising market shrank in the first half of 2009 by 16.6 percent to £7.47 billion, or $11.8 billion. "Perhaps surprisingly, a slowing economy has accelerated the migration to digital technology," Eva Berg-Winters of PWC told Reuters. "Hence the continuing shift from more traditional forms of advertising to online, which promises return on investment and measurability in a period of instability."