UK Internet Advertising Set For Significant Growth in 2003

With Internet penetration in the United Kingdom set to pass 50 percent soon, advertisers there will begin to adopt it as a viable advertising medium in 2003, according to I-level, a London based ad agency.

The agency predicts that Internet ad spending this year will rise 46 percent, while pricing will remain steady with inflation. I-level said the rise would be based on two factors. First, traditional advertisers have taken note that a greater proportion of the UK public is online, with household Internet penetration growing 17.4 percent annually, and will move more money online to take advantage of the audience growth. Second, Internet penetration is coupled with a quickening pace of broadband adoption, which i-level forecasts will more than double the average Internet user’s time online from nine hours a week to 11. As of October, i-level said 1 million UK households had broadband connections. The agency anticipates that will double in 2003, giving broadband a nearly 50 percent penetration in the UK’s 11.5 million households.

“2003 is going to be a very exciting year across the board in interactive media,” said Bob Woods, director of media and advertising affairs at the ISBA, the British advertising trade association. “These figures strongly support this.”

I-level’s figures follow other, slightly less ambitious predictions of growth in Internet advertising in Britain. A study released a month ago by the London Business School and Paris-based communications firm Havas predicted online marketing spending in Britain would increase more than 23 percent this year. ZenithOptimedia, another London agency, in December said 2003 would be a good year for British advertising, which is set to outpace spending in Europe and grow by 2.1 percent to $14.8 billion.

However, the online advertising industry remains small in Britain, accounting for just 1 percent of ad spending in 2002, according to the Interactive Advertising Bureau’s UK branch. The IAB has said it hopes to double this figure by 2004.