The first half of 2010 has seen a dramatic rise in the total spend by British organisations on online advertising, up 10% from last year to £1.97 billion.
The bi-annual online advertising expenditure study produced by the Internet Advertising Bureau (IAB), in partnership with PricewaterhouseCoopers, puts the increase down to a large surge in the video and social network advertising budgets of many small and medium sized companies.
With a current market share of 24.3% of the total UK advertising spend; online advertising is now becoming a major consideration for many businesses. The 10% increase in online advertising is within a context of a 6.3% rise in total UK advertising spend to £8.1 billion, which shows positive signs relating to the increasing confidence in the economy.
The highest spending could be seen in the entertainment and media sector, which has always relied heavily upon advertising within the digital sector. This accounted for 14.4% of total online advertising spend in the UK, followed by finance and fast moving consumer goods.
In what was a largely positive study, figures reflected a sense of optimism in the industry which has not been seen for the past couple of years. Even retail, a sector which has been hit disproportionately severely by the economic collapse, experienced an increased online advertising spend from 7.1% in the first half of 2009 to 8.4% in the same period of 2010.
The chief executive of IAB, Guy Phillipson, commented: “The return to double digit growth in UK online advertising spend is characterised by increased investment by major brands, particularly in fast moving consumer goods and entertainment. The effectiveness of social and video ads for classic brand building is reflected in these formats enjoying exponential growth”.
The report indicates a number of drivers for the recent surge in growth, one being the increase in online users within the UK, mainly due to the proliferation of devices such as Smartphones.
The way people spend their time on the internet is also changing with the IAB claiming UK internet users are currently spending 23% of their time online using social networks and blogs.