National newspapers trail as online ad spend passes 2bn

Online advertising spend in the UK has surged by 41%, topping £2bn and overtaking national newspapers for the first time.

Figures released by the Internet Advertising Bureau (IAB) today (Wednesday) show that in 2006, advertisers spent £2.016bn online.

The data, released in conjunction with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC), shows the internet’s share of overall ad revenue has risen to 11.4%, up from 7.8% the previous year. The growth means that the medium has overtaken national newspapers’ share of ad spend. Newspapers took £1.9bn – a market share of 10.9% – while TV ad revenues dipped by 4.7% to £3.9bn.

According to the IAB, online spend helped bolster the rest of the UK ad industry. Advertising in the UK grew by 1.1% in 2006, yet advertising across traditional media fell by £466.1m year on year: a 2.9% decline.

The figures also show that in the second half of 2006, online advertising experienced its highest reported market share, reaching £1.098bn – a 12.4% share of total UK ad revenues.

Within online advertising, search continues to dominate with a 57.8% share. It grew by 52% last year, to £1.165bn. Classified advertising was also up, rising 45% to £379m, an 18.8% share.  This is in contrast to traditional press classified advertising, which experienced a significant decrease of 7.8% year on year.

IAB chief executive Guy Phillipson says: “The internet is a hugely popular mass medium now, and advertisers are continuing to switch more of their budgets online to build their brands and interact with their customers.

“Last year was a tough one for the advertising market as a whole, but once again the internet bucked the trend.”