Online ad spend figures no biggie

News this week that online advertising spend in the UK had outstripped TV proved to be a surprise to many industry observers. It was a surprise that it was even considered ‘news’ to begin with.

Camille Alarcon

Figures released by the Internet Advertising Bureau (IAB), PricewaterhouseCoopers (PWC) and the World Advertising Research Centre (WARC), revealed that online ad spend grew 4.6% to £1.75bn in the first half of the year giving it a record market share of 23.5%.

Taking the mantle from TV, with its 21.9% share, to become the UK’s biggest advertising medium, the results drew the expected media headlines, ensuring a PR win for the online industry.

But the results were of course a foregone conclusion, coming a year earlier than predictions, not least because of the onset of the recession.

It’s true that in the US TV’s lead over online remains significantly higher, but as Martin McNulty, director of online marketing agency Trafficbroker points out the UK market is in a unique position where the BBC as a non-commercial entity makes up a substantial chunk of the TV industry.

Perhaps more interestingly are the brands which are admitting just how much of their budgets are being put towards online marketing.

Vodafone global brand director David Wheldon told Marketing Week earlier this week that it had increased its digital spend from 5% to 20% in the past three years.

Electrolux has this year begun to significantly invest in online through its websites and CRM programme.

At the end of last year the Swedish domestic electronics company said that it planned to reduce its TV and outdoor spend by a whopping 30% this year, redirecting funds into digital, CRM and experiential activity.

Thinkbox, the TV industry’s marketing body, has of course been quick to downplay the merits of the online ad spend figures, saying that as online marketing spend is made up of many things including email, classifieds, display ads and overwhelming search marketing, all should be treated individually.

While many in the industry agree that Thinkbox does have a point, there is also a general view that the IAB figures remain both valid and credible.

McNulty says what the TV industry should be more concerned about is search, which makes up 59.9% of all online ad spend.

“The big threat to TV is Google which echoes Michael Grade’s [outgoing ITV executive chairman and CEO] comments. Six out of ten pounds spent online are with a search engine and the vast majority of that is Google,” he says.

“What we should really be looking at is the fact that search engine spend grew by 6.8%, while overall ad spend fell by almost 17%. Now that’s significant.”

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