UK Interactive Ad Growth Overtakes All Other Media

Interactive advertising is growing like kudzu in the United Kingdom, breaking records for new expenditures every quarter, finds an Interactive Advertising Bureau UK and PricewaterhouseCoopers research report.

The growth figures come as part of an in-depth report for the first half of 2003 divulged by the industry group. The IAB UK released top-line numbers for the period in December 2003.

The value of Britain’s Internet advertising market will double by 2007, surpassing the commercial radio sector, the IAB UK predicted.

“Marketers are investing more online every month because it works,” wrote Danny Meadows-Klue, chairman of the IAB UK, in an analysis of the numbers. “Online is being used by mainstream marketers to support every aspect of the marketing mix, with a powerful track record now proven for those building brands and generating response.”

The second quarter of 2003 was the single biggest on record in the U.K., with total spending at $142.4 million (#81.3 million). This is an increase of 15.6 percent over the previous quarter’s $123.1m (#70.3) and up 79.9 percent over the same period in 2002.

The reasons for the jaw-dropping rate of expansion are varied. They include dramatic increases in the number of advertisers, the amount of time users spend online, marketers’ increased understanding of online’s branding impact and standardization making online advertising easier.

As in the U.S., paid search is a strong factor, now accounting for 36 percent of the market, up five percent compared to the same period in 2002. Banners remain the most popular format, at least for now.

Market share for the automotive sector tripled from 6 percent to 17 percent of advertising expenditures. The study said the change “reflects the way motoring manufacturers are able to use new creative tools to bring television-style creative to the Web.” Financial service marketers accounted for 30 percent of ad expenditures in interactive advertising, according to the survey, and consumer products make up 13 percent.

The IAB/PWC audit, which the companies have conducted since 1997, measures recorded revenues reported by the finance departments of online media owners, excluding production costs.