Retailers likely to double online ad spend, says IAB

The UK’s high street retailers are set to double their online advertising spend to £65m next year, and will be spending £120m a year on online marketing by 2010.

The figures, from internet marketing trade body the Internet Advertising Bureau (IAB), are a result of retailers attempting to fight back against online competitors.

IAB chief executive Guy Phillipson says: “With talk of a high street slump, retailers must invest in the internet and strengthen their online presence to maintain market share. Online shoppers are enjoying complete control in the buying process.”

The retail sector accounts for only 4.8 per cent of total UK online ad spend, or £31.1m, according to the 2004 PricewaterhouseCoopers/ IAB survey of online ad spend. Research by the IAB in advance of a “state of the nation” industry conference being held next week found that in May 2005, high street sales were down 2.4 per cent, while year-on-year internet sales showed an increase of 30 per cent.

In 2004, UK consumers spent £14.5bn on e-commerce for goods and services, while this year online sales are forecast to reach £19.6bn, up 35 per cent from the previous year. Online sales should account for seven per cent of all retail spending in 2005.

By 2010, UK online sales could total £60bn, accounting for 20 per cent of all retail spend. A further 40 per cent of high street purchases will be researched online.

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