Despite a contraction in online advertising in the wake of the Christmas 2000 adspend bonanza, Britain’s overall internet advertising market during H1 2001 notched a notable year-on-year increase of £26m or 42%.

The data comes from new research carried out by PricewaterhouseCoopers for the UK’s Interactive Advertising Bureau. Uniquely, this is based on revenues submitted by the finance departments of online media companies and is claimed as the only authoritative financial source for the size of the UK online advertising market.

Other key points from the report …

• Internet advertising was the only advertising sector to show double digit growth at 42% while most advertising sectors contracted over the same six-month period in 2000.

• Banners continue to represent the largest component of advertising revenue - still generating the most revenues. However, there is real development of additional media formats such as tenancies, nested content, interstitials and sponsorships. All are demonstrating real incremental growth. The trend reflects that of growth in additional formats in the US market.

• By sector, there are significant changes in spending patterns with Automotive, FMCG, Financial Services and Retail relatively strong while Entertainment, Media, Technology and Telecoms adspend lost share – a similar pattern to that experienced in the US market.

• Leading publishers and ad networks continue to dominate market share as i-ads remain concentrated on top publishers and ad networks. The ten largest publishers and ad networks continue to command 89% of total market share.

Observes IAB chairman/ceo Danny Meadows-Klue: “Adspend in the first half of this year increased massively compared to the first half of 2000. Online is now fixed in the media schedules for brand campaigns and the range of new standards have made the industry an efficient and easy buy.”

Meadows-Klue attributes the sector’s growth to “effective targeting and the unparalleled accountability of online,” while stressing that the IAB deals only in actuals and does not publish forecasts. The figures are “real money, not estimates or conjecture but material cash reported by the finance directors of these companies”.

And, according to PricewaterhouseCoopers’ Paul Pilkington: “In the context of the overall market, the majority of advertising sectors are contracting. But online is performing better than the sector average and the UK online market performed ahead of US where revenues fell by eight percent.”

News source: Interactive Advertising Bureau (UK)