Video and Social Drive Online Display Advertising's Growth in U.K.

Following a year-over-year decline during the first half of 2009, spending on Internet display advertising grew by 6.3 percent in the U.K. during the first six months of 2010, according to the Interactive Advertising Bureau U.K. biannual ad expenditure survey. Overall, online ad spend for the same period grew 10 percent, year-over-year, reaching a total of £1.97 billion ($3.1 billion.)

The report, collated in partnership with PricewaterhouseCoopers, attributed the growth to increased investment in search advertising – which grew 8.9 percent – but also to a rebounding display ad market, which grew by 6.3 percent.

According to the report, spending on pre- and post-roll video advertising drove much of that growth, increasing 82 percent, year-over-year. Meanwhile, advertising on social media sites also contributed to the growth, the IAB said, accounting for 13 percent of all online display ads between January and June.

Overall, however, paid search continued to dominate U.K. digital marketing budgets, accounting for 60 percent of all online ad spending in the first half of the year. Display accounted for 19 percent, the report estimated, with lead-generation and classified ads representing 1 percent and 19.2 percent of spend, respectively.

Guy Phillipson, CEO of IAB U.K., placed emphasis on the contribution from consumer packaged goods and entertainment brands to the increase in display ad spending. The CPG vertical upped its share of digital ad spend from 9.4 percent in the first half of 2009 to 11.8 percent in 2010. Meanwhile, the entertainment sector grew its spend from 13.2 percent to 14.4 percent.

“The return to double digit growth in UK online advertising is characterized by increased investment by major brands – particularly in [CPG] and Entertainment. The effectiveness of social and video ads for classic brand building is reflected in these formats enjoying exponential growth,” Phillipson said in a prepared statement.