Online Overtakes TV
It’s been brewing for the last couple of years, but now it’s official (based on data reported by the UK Internet Advertising Bureau) — UK spending on internet advertising topped £1.75 billion in the first half of 2009, a rise of just 4.6 per cent compared to the same period last year. But the increase was enough for online advertising to pass declining TV spend, which sits at £1.64bn, for the first time in a major market.
Online advertising now accounts for 23.5 per cent of all UK ad spend compared with TV’s 21.9 per cent.
Five key drivers for this precedent-setting result, as identified by the IAB (with our own views added in italics):
- Advertising networks boosting the market: Alongside the major portals, advertisers are increasingly turning to networks to book their online campaigns. According to Econsultancy research, 70% of online advertisers and their agencies work with three online advertising networks or more. Almost half (46%) the say they are working with more ad networks than a year ago, an average of 31% of online display advertising budget is believed to be spent on online advertising networks. As a result, UK agencies and advertisers are enjoying significant operational efficiencies that make life easier when it comes to placing advertising online.
- Online as a direct response medium: 2009 has seen marketing budgets being stretched to their very limits, and online has proved its worth. Improved planning and insight tools have seen more advertisers flock to the medium to take advantage of its targeting, accountability and measurability. It’s very much a sign of the times: in recessionary environments, when CEOs are looking for cuts everywhere, it’s much easier for CMOs to justify expenditure where there’s demonstrable accountability. Conversely, television (despite its many acknowledged strengths) can usually only offer a very murky relationship between spend and sales.
- Growth of new display formats: With the proliferation of video, the internet has become a highly engaging entertainment medium. Alongside tried and tested methods such as rich media, pre and post roll online video advertising is showing strong growth (a 195% increase year-on-year). This indicates advertisers’ willingness to experiment and invest in more engaging and interactive multimedia content. Yeah, maybe. Mostly, however, it’s about comfort and convenience. Advertisers and their agencies understand (or believe they understand) the power of moving pictures. Online video is finally widespread enough that advertisers can simply take their existing TV materials and (often for a fraction of the cost of broadcast television) simply transplant them to the internet. Job done, no thinking required.
- Ecommerce booming: In a time of recession, people buying and shopping are taking to the internet for the best deals, making online the best place to reach bargain-hungry consumers. The continued annual growth in the online retail market is evidence that online is withstanding the challenges of the economic downturn and the retailers that continue to expand and improve their online presence. Say it with us: disintermediation. Cut out the middle man, hand over the savings to the consumer.
- Faster, cheaper broadband: 92% of people now have a broadband speed on over 2MB and 56% of home broadband users now have wireless broadband driving audiences online and allows advertisers to provide consumers with richer branded content (BMRB Internet Monitor May 2009). Or, to put it another way, consumers with decent broadband don’t complain as much about over-indulgent advertising that sucks up bandwidth.
The emergence of online as market leader in the UK advertising world is a significant event, to be sure — paradigm shift and all that. But we should acknowledge that the UK marketing environment has some unique characteristics — for starters, the very existence of the BBC as a dominant but non-commercial television broadcaster means that advertisers have long been restricted in their ability to reach British consumers through the small screen at the levels taken for granted in other markets. As a result, alternative communications offerings have perhaps enjoyed readier acceptance in the United Kingdom than elsewhere.
In other words, it could be a while before other key markets reach the tipping point we’ve just witnessed in the old country.

