Net ad spend up 200%, says study

UK Internet ad spend has risen by more than 200 per cent year on year to the end of June 1998, reaching 4.5m, according to the first industry-wide survey.

The release of the figures, collected by accountancy group PricewaterhouseCoopers, for the Internet Advertising Bureau UK and Ireland, will be followed by regular quarterly reports, according to Charlie Dobres, general secretary of the IAB UK and Ireland.

“We may have been over-optimistic in promising people how quickly we would get these figures out, but we want to get it right rather than get it quick,” he says.

The IAB’s UK branch now hopes to release regular quarterly data and catch up with the frequency and reporting speeds achieved by the IAB in the US.

The report reveals a slight dip in the percentage of total online advertising during the first half of 1998 accounted for by consumer brand categories across the most popular UK and Irish Websites included in the survey. But Peter Petrusky of PricewaterhouseCoopers’ New York office and Dobres say the dip could be explained by the downscaling of online advertising by Guinness during the period. Both expect the category to recover as more consumer brands commit to online advertising.

Petrusky adds: “The number of households online has still not reached critical mass, but it’s getting there. In the US, it’s 25 to 30 per cent, and in Europe it’s five to 40 per cent. The Net is still the fastest growing medium of all time.”

The figures reveal a large concentration in the ad revenue taken by the UK’s top Web publishers, with the top ten publishers in 1997 accounting for 53 per cent of all advertising spend. That figure rose to 60 per cent for the first half of 1998.

This pattern of concentration largely mirrors the experience of the US, according to Petrusky, where “the strongest brands constantly follow the largest reach vehicles”.

But Dobres believes ad spend may be artificially concentrated on high-traffic sites, sometimes at the expense of good targeting of advertising.

IAB data in the US suggests Internet ad spend has grown from $267m (162m) in 1996, to $970m (588m) in 1997, and reached $774m (469m) in the first half of 1998. It remains on track to reach industry estimates of $2bn (1.2bn) for the whole of 1998.

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