A new report on UK advertising released yesterday by the Institute of Practitioners in Advertising estimates that web adspend seized 2.5% of total British marketing budgets during the year’s third quarter, compared with 1.5% in the preceding period.

The report indicates that web advertisers are migrating from bulk space purchases on the most visited sites such as AOL and Yahoo toward more targetable niche areas.

Comments Hamish Pringle, IPA director of marketing strategy: "If you want to buy quality inventory, you are now paying up to £35 to £40 per 1000 views against a commodity site, which charges only about £7 to £10 per thousand."

He also expressed surprise at the spectacular growth rate of online adspend. "In 1999 commercial radio accounted for 5.5 per cent of all marketing expenditure and internet spend is well on the way to half that level," Pringle said.

The data, taken from the IPA’s quarterly Bellwether Report produced by NTL Research, follows news of a significant growth deceleration in US online adspend.

Addressing traditional media, Bellwether notes that over half the companies setting new marketing budgets for 2001 had allowed for higher general expenditure than in the current financial year, with only 19% reporting a decline. The data contradicts predictions by some industry Cassandras of a slowdown in UK advertising growth rates.

In 1999, aggregated UK advertising expenditure reached £15.3 billion. However, there is no data for overall marketing spend, which the IPA estimates at between £20bn to £35bn – suggesting a total internet spend in the region of £500m.

News sources: Financial Times / BBC Online Business News (UK)