IAB: UK Online Advertising Enters Mainstream

British Internet advertising has entered the mainstream marketing mix and is set to overtake cinema ad spending within the next two years, according to the UK arm of the Internet Advertising Bureau (IAB).

Internet ad spending grew by 139 percent to 19.4 million pounds ($31.07 million) in 1998, up from 8.1 million pounds in 1997, exceeding all industry expectations, according to an independent report from professional services company PricewaterhouseCoopers.

Growth was fueled by more people logging on to the Internet, a growing confidence in the medium among the advertising community and more attractive UK Web sites, Richard Hartley, a new media partner in PwC, told Reuters.

He said Britain still lagged behind the U.S. in Internet development by at least a year but he expects UK growth to continue accelerating.

Danny Meadows-Klue, director of IAB UK, said it is important for Internet advertising to be rated alongside traditional media.

“I think as Internet advertising becomes mainstream, we have to see it ranked compared to other advertising media and cinema is probably the first one that we should be picking off… within the next couple of years,” he told Reuters.

Cinema reported UK revenues of 97 million pounds in 1998, up 10 percent on the previous year, double the growth of national advertising spend as a whole.

The growth of Internet advertising in the UK comes as a number of free ISPs are driving British consumers online with the offer of subscription-free access.

The top 10 UK Web sites accounted for 60 percent of advertising revenues, up from 53 percent in 1997, according to the report. A small number, around one percent, bartered advertising space. Banner advertising continued to dominate, making up 91 percent of spending when combined with sponsorship, although Hartley warned of “banner fatigue” as consumers tire of the medium’s main advertising method.

Meadows-Klue said a wealth of different methods, including interactive promotions, direct response and editorial content partnership would develop as the medium matures.