Online is now number one in the UK

Online commands respect : Another IAB Ad Spend report, another milestone for online – this time the big one

We released the IAB Ad Spend results today, with the record breaking news that not only has Ad Spend grown again – as it has every half year since we launched the survey in 1998 – but we have finally done what media pundits have been guessing and betting on for years. That is we are now the largest medium in the UK, with 23.5% share of all media spend now being spent on online display, classifieds and search. We are larger than TV not by a fraction, but by £113.6 million. We are also now larger than press display by £369 million.

We know that this is happening in a strange market however, with rumours that TV prices are back to 1980s levels (so it’s not just fashion that’s harking back to the good old days of Dynasty-style shoulder pads and studs, but TV prices too) and constant press stories decrying the fall of print circulations, all too often ignoring some of the success stories bucking the trend in both of these media. But the important thing for us here at the IAB, and the reason why we are very proud of our industry, is the proof that when the going gets tough, online can more than hold its own against other media. Budgets are being cut and prices are falling, but online is maintaining and growing its importance in the media budget.

Just to put the sceptics point of view across, we do present the data splitting press display and classified, so press combined is still the largest media. And we do include search in our figures, which some commentators are quick to point out is maybe not fair when comparing this to display media in particular. But the rise of search agencies with large blue chip clients spending their large blue chip client marketing budgets shows that this is not just an online directory service, it is a core part of the total media and brand marketing mix, not just the online bit. And even though online display did fall a bit on this time last year, though only by 5.2%, it remains the most successful display media in growth terms, with all other display media falling dramatically in this recession, with only cinema at 7.8% decline also getting away with single figures declining growth rates.

At £317 million for the half year to June 2009, online display is showing its strength and we expect it to ride out the rest of the recession well against other display formats. This is an exciting time to be selling online display, as new methods of targeting, behavioural advertisingand reach measurements are becoming mainstream and the introduction of UKOM, the online industry’s answer to calls for one source of planning data, is being launched to build further confidence and growth in online display.

Classifieds are growing but are having a mixed time of it, with recruitment classifieds falling from this time last year, but growing from the last six months of 2008. All other classifieds are performing very well online showing growth from the same period last year, and in total classifieds makes up 22% of the online marketing mix, showing the effectiveness of and belief in this medium.

Search is by no means the be all and end all of online, though it has been a medium worth over £1 billion every six months for the last year. And it shows no signs of declining from this. As new offerings such as Bing bring innovation and choice to the market, and new product launches from Google such as FastFlip means this medium keeps being relevant and effective for advertisers.

We at the IAB are very excited for the next six months to see where ad spend will end up for the whole of 2009, even if sadly I won’t be here to announce it as I am leaving to start my own business. However I am very happy that my last week at the IAB sees the announcement of the big news that, perhaps earlier than most of us expected, online is now number 1 in the UK. And I was there at the heart of the industry when it happened.

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    About 10 years ago some of us sat down to play the piano. How they laughed then.

  • Dave Trott

    I know we both agree with Whitehead “Sometimes the opposite of a great truth is another great truth”
    and Tony Benn “Democracy is about the vitality of the debate, not about crushing the opposition”.

  • Dave Trott

    Just one tiny nit-pick.
    Saatchi’s actual (usually misquoted) comment was “In order to win I just have to make you lose”.
    Much more interesting and useful than “it’s not enough” IMHO.
    (Witness how Brazil broke Spain last night.)