U.K. Online Ad Spend Exceeded T.V. in First Half, Says IAB

U.K. online ad spend has now surpassed TV, according to the UK Interactive Advertising Bureau’s bi-annual ad spend study, released today. The digital marketing trade body said the medium attracted $2.8 billion, or £1.75 billion during the first half of 2009. That’s an increase of 4.6 percent over the same period the previous year, accounting for 23.5 percent of overall ad spend within the U.K. By comparison, TV advertising accounted for 21.9 percent in H1, according to PricewaterhouseCoopers, which conducted the study in conjunction with the IAB U.K. and the World Advertising Research Centre.

Search continues to dominate the online sector, growing 6.8 percent year-on-year to account for 59.8 percent of spend. By contrast display advertising contracted 5.2 percent, accounting for just 18.1 percent. Classified ads made up the majority of the remaining spend, growing over ten percent to take a 22 percent slice of the total online pie.

IAB U.K. President and CEO Guy Phillipson predicted a similar rate of growth for the second half of the year, and blamed loss of revenue in the display market on economic conditions, rather than long-term factors. “Display has not been immune, but it’s weathered the storm better than some mediums, and held up really well considering the circumstances,” he told ClickZ News. “2010 is likely to continue to be challenging, but display will see a return to growth in the future. There are too many dynamics in the market to predict when it will bounce back, but we’ll probably see a healthier 2011.”

Indeed some green shoots already appear to be sprouting. Albeit from a relatively small base, video enjoyed considerable year-on-year growth of 195 percent.

In January, media buying agency Group M predicted the U.K. would become the first major advertising economy to see online spending surpass traditional TV ads. Drawing on data provided by holding company WPP’s international advertising and market research resources, the agency said a year-over-year increase in online ad spending of 6 percent would push it above television spending in 2009.

However, despite the clear and encouraging overall growth in the online market, some raised concerns over the basis for the IAB’s comparisons with other media, questioning in particular the formats included in the “online” category.

Commenting on the IAB numbers, Lindsey Clay, marketing director at Thinkbox, the marketing trade body for the U.K’s commercial TV industry, suggested marketers should be more concerned with the benefits offered by joint campaigns, rather than emphasizing which medium comes out on top in terms of ad spend. “[T.V. and online] are the perfect marketing marriage�. To set them up in competition is a mistake, and misses their complementary relationship,” she said.

In reference to those comments, Phillipson said the IAB was not attempting to compare the effectiveness of the two mediums, but was merely pointing out that “the online platform attracted more cash than the T.V. platform.”

Clay also contended that because much of online video currently consists of repurposed or republished TV content, aspects of online video ad growth are arguably being fuelled, albeit indirectly, by the TV industry.

The IAB numbers also revealed the top spending verticals, with technology, telecom, and finance accounting for 19 percent, 13 percent, and 13 percent, respectively. The media and entertainment category spent 12 percent, and travel and transport advertisers spent just under 10 percent. Given the current economic climate, recruitment was the only sector to dramatically reduce its spend, falling from a 10 percent share in the first half of 2008 to less than 1 percent this year.