UK online adspend growth plummets

08 July 2009

LONDON: Online adspend in the UK will increase by just 0.9% this year, to £3.38 billion (€3.9bn; $5.5bn) overall, according to a forecast from eMarketer, the internet research firm.

Total advertising expenditure in Britain will decline by 11.7% at current prices, to £14.5bn, in 2009, with web revenues up by just 1.4%, according to a recent estimate from WARC and the Advertising Association.

In its new report, entitled UK Online Advertising: Spending and Trends, eMarketer predicts the internet will take a share of over 20% of all ad revenues in the country this year.

Despite this, the company expects the medium's growth to fall below 1% during 2009 as a whole, compared with an expansion of over 19% last year.

Karin von Abrams, a senior analyst at eMarketer, argued that "online ad spending has been hit harder than most UK marketers thought possible even a few months ago."

"Budget cuts have affected all industry sectors, including many that contributed significantly to online ad spending, notably banks and financial services, automotive and retail," she added. 

However, while growth is slowing this year, von Abrams added that "the economic crisis seems to be actually accelerating the shift of marketing funds online."

As such, the web will "regain some momentum" next year, with growth reaching 4.7%, before an improvement of 10% in 2011, and 11.3% in 2012, when the Olympic Games in London will boost revenues.

Data sourced from eMarketer; additional content by WARC staff