IAB figures show big increase in online spend

Britain’s marketers spent £266.8m on online advertising in the first half of 2004, a 76 per cent increase on the same period a year earlier. Perhaps more importantly, online advertising is rapidly catching up radio, with online now accounting for 3.2 per cent of all UK ad spend, compared to radio’s 3.7 per cent, according to the Interactive Advertising Bureau and PricewaterhouseCoopers. By comparison, total advertising spend in the UK rose by just 5.7 per cent to £3.7bn.

The figures suggest that the total spend on online advertising this year will be well over £500m.

Interactive Advertising Bureau UK chief executive Danny Meadows-Klue points out that one of the IAB’s key targets when it was set up in 1996 was for online advertising to overtake radio by the end of 2007.

He says: “It now looks as if we’ll achieve that objective by the end of this year, three years early. We’re charting a fundamental shift in the way the advertising community behaves, and there’s no going back.”

Meadows-Klue believes that growth continues to be driven by the explosion in search-engine marketing, but adds that there has also been significant growth in brand-building campaigns, as creative directors better understand how to use the online medium.

Studies conducted by the IAB both in the UK and US suggest that the optimum spend on online in an integrated campaign should be between ten per cent and 20 per cent of the total media budget – at present, most UK marketers are spending a maximum of five per cent on online.

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