IAB figures show sharp rise in internet ad spend

Marketers spent £353.6m on online advertising in the UK in 2003, an 80 per cent increase compared to the previous year.

Marketers spent &£353.6m on online advertising in the UK in 2003, an 80 per cent increase compared to the previous year.

Perhaps more importantly, the figures – released by the Interactive Advertising Bureau UK and PriceWaterhouseCoopers – show that in the second half of 2003, online advertising accounted for 2.5 per cent of total UK ad spend, two-thirds as much as radio advertising.

Results from the Institute of Practitioners in Advertising’s quarterly Bellwether Report, also published this week, broadly support the IAB’s claims, with the internet accounting for just under three per cent of total UK ad spend in the second quarter of 2004.

IAB UK chairman Danny Meadows-Klue says: “Growth continues to be very strong and we are definitely on track to achieve our objective of overtaking radio by January 2007.”

The IAB has identified a number of factors contributing to the strong growth. These include more consumers coming online, the standardisation of ad products, the creative industry waking up to the possibilities offered by the internet, and the increasing importance of search engine marketing.

The figures have been welcomed by media owners, internet service providers and agencies.

Dan Clays, managing director of BLM-owned online agency Quantum Media, says growth is being driven by the telecoms sector, travel, finance and automotives. He says: “Packaged goods spend is still relatively small, but it is growing in confidence.”

Clays expects growth in 2004 to match 2003, as more households switch to broadband services which will “accelerate consumer usage and time spent online, which means more brands will spend more on internet advertising”.

AOL UK vice-president of interactive marketing Andy Jonesco says the figures are welcome but “no great surprise as the industry has been experiencing strong growth for some time”. Jonesco adds that AOL expects overall market growth to remain strong as increasing numbers of advertisers “recognise the powerful brand-building attributes of the online medium”.

The IAB research has been tracking internet advertising spend since 1997. The figures are based on data supplied by online media owners, and audited by PriceWaterhouseCoopers. They do not include production costs.

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