Tuesday, April 3, 2012

UK web advertising spend to hit £5bn

Facebook-on-iPad-008 UK internet advertising spend is likely to reach £5bn in 2012, with Facebook on track for an estimated 84% revenue surge to £175m.

Companies spent £4.78bn on all forms of internet advertising in the UK in 2011, with 14.4% year-on-year growth the biggest surge since 2007, according to an Internet Advertising Bureau report conducted by PricewaterhouseCoopers.

The UK needs to see growth of just over 4% in 2012 – pretty much a certainty given historical levels – for the market to be worth £5bn annually.

Strong growth in 2011 was partly due to an explosion in advertising on mobile devices and tablets, which rose 157% to £203m last year.

Online video advertising doubled year on year to £109m as online TV services such such as the ITV Player and Channel 4's 4oD increased in popularity.

These two sectors have helped fuel the overall display advertising market – banners and interactive ads seen on most websites – to more than £1bn for the first time.

Display advertising grew by 13.4% to £1.13bn in 2011.

The IAB said that the display ad market has been pumped up by fast-moving consumer goods companies such as Unilever and Procter & Gamble finally latching onto the sector.

The big FMCG companies are the biggest UK advertisers on traditional media, such as TV, press and radio, but have been slow to recognise the benefits of display ads.

One of the biggest beneficiaries of the surge in display advertising is Facebook, which figures from Enders Analysis estimates doubled revenues in 2011 to just under £100m.

This unofficial estimate – Facebook does not disclose its financial performance – is expected to surge by a further 84% this year to £175m.

The stalwart of UK internet ad spend is search advertising. which is dominated by Google.

Search, which accounts for 58% of total UK digital ad spend, grew 17.5% in 2011 to £2.77bn.

The growth has come from the British public's love of web search and the cost-effective nature of search advertising.

There is a very good chance that the IAB, which produces two reports a year on digital ad spend, will say that the UK is on track to hit the £5bn mark when it reports on the market for the first half of the year.

The Telegraph

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