Online ad spend set to topple TV

Online advertising spending in the UK shot up by 38 per cent to £2.8bn last year, and is on track to knock TV off the number one spot by the end of next year, according to figures published today.

At £2.8bn, the internet represented more than 15 per cent of the overall market in 2007, up from 11 per cent the year before. The sector has grown nine times faster than the overall advertising industry in the last three years, already out-performing the classified and regional and national newspaper sectors. It is predicted to hit £3.5bn in 2008 and pass the £4bn-mark in 2009, says the report from the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

A key factor in the on-going health of the market is the rise of the online advertising network, which acts as a broker and enables advertisers to access a whole range of websites.

"The portals have extended their offering by buying networks that are particularly attractive because for a low cost you can advertise across thousands of sites and the return on investment is good," Guy Phillipson, the IAB chief executive, said.

Some of the biggest global players are scrabbling for a piece of the increasingly lucrative action.

On Sunday Yahoo announced details of its forthcoming "AMP" management system, which is designed to simplify the process of buying and selling ads online. And Yahoo directors name-checked the scheme in yesterday's letter rebutting Microsoft's $42bn (£21bn) takeover approach as undervalued. Microsoft's approaches to Yahoo are also part of an online strategy, that has already seen it spend $6bn to buy aQuantive, an online ad company, last May. And Yahoo itself bought the Blue Lithium network for $300m in September. WPP, the world's second-largest group of ad agencies, bought online broker 24/7 Real Media for $649m in May after losing out to Google for the purchase of Double Click, the world's biggest online network – the $3.1bn purchase of which was cleared by regulators last month.

"The land grab is very real, fuelled by the continued spending growth and the sector's rosy prospects, particularly as traditional media are either going down or barely meeting the rate of inflation," Mr Phillipson said.

Online advertising may also be a beneficiary of credit crunch-inspired belt-tightening. According to a survey of small businesses by New Brand Vision Group, firms are more inclined to cut traditional marketing budgets than online spend in the event of an economic squeeze.

Nicki Lynas, a senior manager at PricewaterhouseCoopers' entertainment and media practice said: "The internet will do really well in an economic downturn because advertisers are able to set both their budgets and their results targets – it is more controlled and more flexible and more provable."

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Arts and Entertainment
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Steve Bruce and Gus Poyet clash
Graham Norton said Irish broadcaster RTE’s decision to settle was ‘moronic’
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths
ebooksA special investigation by Andy McSmith
Life and Style
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
Amazon misled consumers about subscription fees, the ASA has ruled
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn