Online Ad Spend surpasses TV for the first time
A study by the IAB and PricewaterhouseCoopers released today showed that online ad spend has surpassed TV in the UK as the single biggest advertising medium. Online advertising now accounts for 23.5% of all UK ad spend at a total of £1.75 billion. This is an increase of 4.6% compared to the previous year while TV dropped by 17%.
The lion’s share of the online spend goes to search with 59.8% (£1.04 billion). PPC showed string growth with a reported increase of 6.8%. Online classifieds made a strong return with a 10.6% growth increase resulting in a 22% share of entire online spend.
The study also segmented the verticals in which the trends can be analysed further.
Technology is the biggest spender with 19% of the overall market followed by Telecoms (13.3%), Finance (13.2%), Entertainment and Media (11.8%) and Consumer Goods (8.1%).
Eva Berg-Winters explained the trend as somewhat of a surprise: "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."
I’m sure most of us in search are less surprised as the transparency and ROI achieved through a good search marketing campaign is unsurpassed.
One key driver that has forced this change is the recession, but not only from a budget allocation perspective. It has forced a change in user behavior which has resulted in an ecommerce boom with most savvy consumers shopping online for the best prices. This has resulted in major closures on the high street but has resulted in an increased importance being placed on a brands’ online marketing strategy.
It is also very important to realize that the entire ad spend contracted by 16.6% in the period. That’s a huge £1.4 billion reduction. When the recession is over where is this budget going to be spent? I wrote a post last week about what I think will happen next but I’m sure there will be a lot of varying opinions out there.
With PPC click rates declining SEO seems like a really good place to be right now.