Growth in U.K. Online Ad Spend Slows, Search Continues to Grow

Growth in U.K. online ad spend halved during 2008, increasing by 17.1 percent to £3.35 billion, down from the 38 percent year-on-year increase it achieved in ’07, according to the IAB U.K.’s bi-annual online advertising expenditure study. The U.K. market slowdown mirrors that of the U.S. market; the growth rate here was also sliced in half in ’08. According to the report, online now makes up almost 20 percent of overall U.K. ad spend, up from a 15 percent share in 2008.

Within online itself, paid search spend grew 22.7 percent year-over-year, representing almost 60 percent of all online spend in 2008. Perhaps unsurprising given the current financial situation and the relative accountability of search, display grew far less rapidly, at 7.7 percent, and represented 19 percent of spend. Online classifieds made up the remainder of spend at 21.4 percent, having grown 22.2 percent from 2007.

The IAB points to ad networks as a growth driver, and notes they now account for 44 percent of display spending. However, network spending is only up marginally from its 40 percent share in 2007.

In terms of verticals, recruitment leads across all formats, accounting for 23.8 percent of overall online spend, followed by Automotive at 13.5 percent, Technology at 11.2 percent, Property at 9.7 percent, and Finance at 7.6 percent.