Google's UK advertising revenues to surpass Channel 4's

Advertising revenues in the UK for the internet search engine Google will easily surpass ad sales at Channel 4 this year, the broadcaster's chief executive has said.

Channel 4's Andy Duncan said Google would take in £900m from the UK ad market in 2006, compared with £800m at the TV group.

Channel 4's rival, ITV, will see ad revenues shrink by double digits this year, while other traditional media, such as newspapers and magazines, are also struggling to cope with declining advertising sales. By contrast, ad money is flowing into the internet, where ad sales rose by around 40 per cent in the first half of this year.

Mr Duncan, who is lobby-ing the Government and regulators for financial support, said: "[This] reinforces that significant structural change has been going on and will continue to go on.

"Some broadcasters have been very slow to realise this. The industry as a whole is frankly rather backward-looking and is perhaps underestimating the scale of change that is going on and the pace of change."

As the public watches less television and spends more leisure time on the net, advertising expenditure has followed.

According to figures from the Internet Advertising Bureau, the web in the UK will take in ad revenues of £2bn this year, surpassing the combined revenues of the entire national newspaper sector, making the internet ad market more than half the size of the TV industry.

Nick Waters, the European chief executive at MindShare, an agency which advises clients on advertising expenditure, said: "There is a danger that free-to-air broadcasters will get caught in a death spiral."

Free-to-air broadcasters, such as Channel 4 and ITV, have a business model dependent on selling advertising slots. Mr Waters said that, as advertising money and eye-balls deserted television, TV companies would have less money to invest in the sort of programming that might entice audiences back. Mr Waters said: "We are moving from glossy brand-building, which television is good at, to direct marketing, which the internet is suited to."