IAB says online ad growth slowed to 4.2% in 2009

The growth in online advertising spend slowed last year as the global recession hit digital marketing budgets.

UK internet advertising expenditure grew 4.2% year on year to £3.5bn in 2009 compared to a 17.1% uplift in 2008, according to the bi-annual survey by the IAB and PricewaterhouseCoopers.

However, retail and consumer goods entered the top five biggest display category spenders for the first time in the study’s history, accounting for 12% and 10.1% of total spend respectively. Telecoms, and entertainment and media were the biggest spenders, on 15.6% and 15.5% respectively.

IAB chief executive Guy Phillipson (pictured) says the 4.8% increase is still a “strong” performance “at a time when marketing budgets were under severe pressure”.

Paid search again took the largest share of online advertising spend. Investment increased by 9.5% to £2.15bn and paid search increased its share from 59.3% in 2008 to 59.7% last year.

Display ad spend dipped by 4.37% to £709.3m but showed an improvement in the second half. Expenditure was £374.7m between July and December, compared to £334.6m in the second half of 2009.

Classified spend dropped by 5.3% to £677.4m, hit by the downturn in the recruitment market.

Despite the slowdown in growth, most estimates show that online advertising outperformed all other media channels last year and is expected todo so again in 2010.

Graham Cooke, managing director of QuBit Digital and a former Google executive, says online has prospered throughout the economic decline “as it remains a measurable and accountable media”.

He adds: “As the growth of the online population levels out, businesses will need to focus on measurement and optimisation to continue to see online advertising grow at a good pace”.

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