The internet has now arguably overtaken television in terms of advertising spend in the United Kingdom. Online advertising grew by 4.6% in the first half of 2009, despite the recession, while the entire advertising sector contracted by 16.6%. Online advertising accounts for nearly a quarter of all advertising expenditure in the United Kingdom, the largest share for any major world economy. Some may question how the cake is divided, but there is no doubt that the internet is taking an increasingly large share of advertising revenue.

The latest figures come in a report on online advertising expenditure from the Internet Advertising Bureau, in partnership with PricewaterhouseCoopers and WARC, the World Advertising Research Centre.

The report says the results signal a significant restructure of marketing budgets as advertisers follow their audiences online and look to the internet for even more measurable and accountable methods.

Over 60% of online advertising revenue is accounted for by paid-for search, for which marketers in the United Kingdom paid over £1 billion in the first half of 2009. The remainder is almost equally split between other classified and display advertising.

“Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions,” said Guy Phillipson, the chief executive of the IAB. “We have a rollercoaster of a year ahead but even in tough economic conditions marketers still recognise the value, accountability and measurability of online advertising.”

It seems that touch times are leading marketers to the more measurable medium of online advertising to demonstrate return on investment.

“Perhaps surprisingly, a slowing economy has accelerated the migration to digital technology and hence the continuing shift from more traditional forms of advertising to online, which promises return on investment and measurability in a period of instability,” commented Eva Berg-Winters of PricewaterhouseCoopers. “The only certainty is that this transgression demands fundamental structural change of business models across all industries.”

Online accounted for just under 20% of advertising expenditure in the United Kingdom in 2008, up £540 million to £3.4 billion, while total spend on advertising fell by 3.5% to £17.5 billion.

Thinkbox, which was set up by commercial television companies to promote television advertising, responded by questioning the figures.

“The implication that online advertising is taking broadcast TV’s money is just not true,” said Tess Alps, the chief executive of Thinkbox. “Last year broadcast TV spot advertising declined 2.9% compared to total advertising declines of 4.2% and display declines of 5%. Not the spectacular share growth of online maybe but growth nonetheless.”

Growth of share against dramatic falls in print and direct marketing is one rather desperate way of defining growth in television advertising.

Newspapers and magazines collectively still account for the single largest segment of advertising expenditure, with broadcasting, including television and radio coming second, just ahead of online.

That said, the absolute increase in online expenditure in the face of a decline in spending in broadcast and print appears undeniable.

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