E-Commerce Shoppers Drive Paid Search in UK, Study Reveals
Thursday, 11 October 2007
UK online advertising spending hit £1.33 billion ($2.66 billion) in the first half of 2007, up from £917.2 million ($1.83 billion) in the first half of 2006, according to an Internet Advertising Bureau UK-commissioned study by PricewaterhouseCoopers and the World Advertising Research Centre.
The IAB UK predicts that online ad spending may reach £2.75 billion ($5.5 billion) by the end of 2007.
"These figures demonstrate that online advertising and marketing, like the Internet audience, have truly come of age in the UK," said Karin von Abrams, eMarketer senior analyst. "With average daily Web use up 158 percent in the past four years and online campaign measurement growing in sophistication, advertisers have little hesitation about spending major sums on the Net.
"The UK economy was generally buoyant in the first half of 2007," Ms. von Ambrams said. "Even so, it's remarkable to see online advertising rise so strongly on the back of robust gains last year. If the holiday shopping season does push total online expenditure to £2.75 billion by year-end, we could also be looking at a phenomenal year in 2008."
The UK ad market grew by 3.1 percent in the first half of 2007, to £9.1 billion ($18.2 billion). Without online, ad spending would have dropped by 1.9 percent (£147 million or $294 million).
Online accounts for 14.7 percent of all UK advertising spending, according to the IAB UK.
"Nine in 10 UK Internet users are on broadband now, and nearly 40 percent are using wireless," said Guy Phillipson, CEO of IAB UK, in a statement. "We’re also seeing women and the over-50s spending far more time online, which makes the Internet a very attractive medium to a broader set of advertisers."
Online classified ad spending is growing by 72 percent annually and accounts for 20.8 percent of all Internet advertising spending.
Internet display advertising rose 33 percent to £287 million ($574 million) and a share of 21.5 percent.
Paid search was up 44 percent, to £762.3 million ($1.52 billion), and took the lion's share of Internet ad spending with 57.1 percent of the total. The IAB said that at least one-half of all e-commerce transactions started with a search, driving the ad category's growth.
The IAB UK did not detail what comprised the remaining 0.6 percent of online ad spending, which likely included e-mail ads.
eMarketer's own prediction for the UK online ad market is generally in line with the IAB numbers, at £2.64 billion ($5.28 billion) for 2007. That prediction will be slightly low should the IAB's 2007 projection of £2.75 billion ($5.5 billion) come to pass.