Online Ad Spend surpasses TV for the first time

Wed 30 September 2009 11:00, Louis Venter

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.

<Google Adwords sitelinks also sh...

Our Daily Search Pic(k): waiting...>

Comments (5)

- Lisa Myers
- [website]
Yay! I knew it was going to happen, have been waiting for these new stats. Great sum up Louis, me like ja :)

Indeed I agree I think budgets will increasingly see spend being made on SEO if not replacing at least in addition to PPC. All hail SEO ;p

No seriously, it's good news, I think the financial climate has had a big impact and might even have caused the internet spend taking over TV. If I was a Marketing Director I would put more money into where I can prove the ROI, no brainer. Ok so I'm slightly biased :)

Wed 30 Sep 2009, 13:37
- Louis Venter
- [website]
Yeah im ever so slightly biased too but really i see it as a no brainer. Right now is a great time to be in search whether PPC or SEO, but especially SEO.

That said theres a big difference between good and *&*(&^ SEO and I hope the market doesnt flood with loads of people suddenly becoming experts, ive heard a lot more rubbish than usual recently...

Wed 30 Sep 2009, 14:30
- paul
- [website]
SEO drives 20-50% of the total website traffic to websites and it's rather cheap...we call it earned media :-)

Wed 30 Sep 2009, 16:18
- Louis Venter
- [website]
hehe thats a good phrase...

Wed 30 Sep 2009, 16:19
- Nigel Cooper
- [website]
Really pleased to see digital spend outweighing that of TV... but still not sure it's being spent in the right direction...

Engaging people with your brand or product online is the aim for digital spend - and I reckon Google ads make up a large portion of the stats for this online increase - this is fine, but where's the social media spend?

All too often, all or most digital spend goes on advertising - banner and display ads - not on community engagement.

I think this is because people think social media outreach is fluffy... but there are stats to prove otherwise.

We ran a benchmarking study with social media against banner advertising... the results were really interesting.

In our study, banner ads were more expensive and less effective that social media in terms of awareness and engagement.

You can see the report for free here if you're interested:

http://www.qubemedia.net/banner-ads-social-media.php">www.qubemedia.net/banner-ads-social-media.php

___
Nigel Cooper
Community Director - Qube Media
www.qubemedia.net

Wed 7 Oct 2009, 12:56

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