UK Adspend Online Achieves 7% Growth in 2001

17 May 2002

Total online advertising spend in Britain grew by 7.1% year-on-year to £165.7 million ($241.81m; €264.93m) in 2001, according to data published Thursday by the Interactive Advertising Bureau in London.

The research, carried out by PricewaterhouseCoopers, measures the industry’s recorded revenues reported by the finance departments of online media owners. It claims to be the only authoritative expenditure source by which the size of the UK market can be gauged.

Total spend, up from £154.7m in 2001, is deemed encouraging because there was clear growth despite a depressed economic landscape, recessionary behaviour in the advertising market and exceptional factors within the online sector. The majority of the gains were made during the first half of the year but in general online’s performance closely mirrored the advertising sector as a whole.

Relative to other media, online’s performance echoed the trend of television and press display advertising in particular. Driven by the weakness of brand advertising expenditure almost all media experienced a fall during the third quarter of 2001.

Media channel switching became more marked as advertisers pulled spend from television and press display to move into more accountable channels creating significant changes in the total spend in each media.

A key driver of internet growth was the continued increase in audience. Other significant factors were the development of new online ad formats, including interactive ‘rich media’, which along with a broad range of standards developed by the IAB, helped spread adspend more broadly across the portfolio of advertising products.

Although the volumes and spend invested in the historically dominant banners and buttons rose, there was a marked increase in the use of rich media formats including the new standard positions such as the ‘transitional’ advertising spaces between pages.

Comments Danny Meadows-Klue, IAB chairman and chief executive: “The industry should be encouraged that it experienced growth despite tough economic conditions. Audiences continue rising and commercial confidence levels are up. Today the marketing campaigns of traditional brands are driving the medium’s growth – replacing the marketing dominance of young internet companies. This lays secure foundations for the sector, key to establishing a long-term pattern of sustainable growth.”

Paul Pilkington of Pricewaterhouse Coopers agrees: “With year-on-year growth of seven percent – the second highest of all UK advertising sectors – the internet can claim to have held its own in a very tough climate.”

Data sourced from: Interactive Advertising Bureau (UK); additional content by WARC staff