Online adspend rises in UK

04 April 2012

LONDON: Online ad expenditure posted a double-digit expansion in the UK last year, with social media, video and mobile among the main drivers of this trend.

Figures from the Internet Advertising Bureau, the industry body, and PricewaterhouseCoopers, the business services firm, showed that web spending climbed by 14.4% to £4.8bn last year.

Paid search logged a 17.5% lift in demand, and was worth £2.8bn. This channel's market share rose by a single percentage point, hitting 58%.

Display revenues also leapt by 13.4% year on year to £1.1bn, a 24% share. Three-quarters of category sales were for banners and other embedded formats, but various additional areas are seeing rapid growth.

Video ads, for example, saw an expansion from £54m in 2010 to £109m in 2011. Social media has been another spur for display, as banners on sites like Facebook and LinkedIn drew £240m, bettering the previous 12 months by 75%.

By sector, financial services took a 15% share of the display market, a total matched by FMCG manufacturers. Retailers recorded 12% here, the same score as entertainment and media.

"Online display advertising is becoming more attractive to consumer-facing businesses, and it is the retail and consumer advertisers who are increasing their adspend budgets the most," Tim Elkington, the IAB's director of research and strategy, said.

Elsewhere, classifieds enjoyed a 5.2% expansion, attaining a value of £785m. Mobile, however, witnessed the most impressive improvement, of 157% to £203m in all.

The core drivers of overall growth included the increasing size of the internet audience, which reached 39.7m active monthly users in 2011, up by 375,000 compared with 2010.

Social media is also consolidating its position as a source of online engagement for consumers, accruing 27% of the time spent on the web in 2011, according to UKOM, the measurement body.

Furthermore, comScore found that 18.8m mobile phone subscribers accessed platforms such as Twitter and LinkedIn via these devices in the three months to January 2012, a 35.6% improvement year on year.

Video usage is similarly rising, with 27.3m internet users streaming this form of content during February 2012, indicative of a broader shift in popular habits that have taken place over the last year.

Data sourced from IAB; additional content by Warc staff