Online Ad Spend in the U.K. Exceeds Estimates

Online advertising revenues in the United Kingdom increased by 62.3 percent in the first half of 2005 over the same period last year, overtaking outdoor in market share a full year earlier than expected. The figures come from a report conducted by the U.K. Internet Advertising Bureau (IAB) and PricewaterhouseCoopers, which is expected to be released today.

The online ad spend climbed to £490.8 million ($861 million) in the first six months of this year, exceeding previous estimates for the period. The uptake equaled a 62.3 percent increase over the first half of 2004. IAB U.K. expects growth to reach £1 billion ($1.8 billion) by year end. In 2003, the total ad spend for the year equaled £407.8 million ($715.9 million), less than what was brought in during the six month period between January and June of this year.

Online rose to account for 5.8 percent of the market, surpassing outdoor advertising, which accounts for 5.1 percent of the total ad spend in the U.K. Previous IAB U.K. estimates expected online to overtake outdoor by mid-2006.

The IAB U.K. attributes the growth in online spending on four factors. An increase in broadband penetration, rich media, media consumption, and an online retail boom all drove the shift of ad spending to the Web.

The news of the 62 percent increase in ad spending in the U.K. comes one week after the IAB in the U.S. announced a 26 percent rise in the first half of 2005 over the same period one year before.

The IAB U.K. report was compiled from a survey of 75 companies representing thousands of Web sites. Total advertising revenue is reported on a gross basis. The IAB U.K. has worked with PricewaterhouseCoopers to report on online advertising since 1997.