Digital State Consulting

Online advertising spending in the UK has overtaken television expenditure for the first time, a report has said. Online spending grew 4.6% to £1.752bn in the first half of 2009, while TV spending shrank 16.1% to £1.639bn. This is good news for the online marketing agencies, who will benefit from the increased usage of the internet for marketing.

Overall advertising fell 16% compared with the same period in 2008, said the study by the Internet Advertising Bureau and PricewaterhouseCoopers. Online marketing companies will be buoyed by this news and will march on in search of potential new revenue streams.

E-mail campaigns, classified adverts, display ads and SEO are all classed as online advertising. The digital marketing sector has been boosted recently, especially in the field of SEO and Adwords (PPC) marketing. The body representing UK commercial television broadcasters said that the comparison was unfair. The recession had accelerated the migration of advertising spending to digital technology – from more traditional media such as print, radio and television advertising to online, according to the report.

This is unsurprising as the modern world moves towards an online and search engine driven world, Google being at the forefront of this. Google’s analytics is a good example of how they are helping digital marketing companies promote their clients’ sites.

Technology firms were the biggest spenders on online adverts, making up about 19% of the market, the report said, followed by telecoms firms, the finance sector and entertainment and media. Online ecommerce and online retail is a booming field for online advertising and is being helped by the drive in search marketing recently.

Online advertising  – such as banners – had “performed notably well against its peers in TV, print and radio”, said Guy Phillipson, chief executive of the Internet Advertising Bureau.

“We have a rollercoaster of a year ahead, but even in tough economic conditions, marketers still recognise the value, accountability and measurability of online advertising.”

However, Thinkbox, the marketing body for the main UK commercial television broadcasters, said the figures did not compare like with like. They think that the individual methods of revenue for the online industry should be judged separately and not lumped into one big ‘online’ field.

“The internet is a fantastic technology and home to many different marketing activities that do different things. As such, it is interesting but meaningless to sweep all the money spent on every aspect of online marketing into one big figure and celebrate it.

However, television advertising remained the most effective advertising medium. This, however, in the future, is likely to be overtaken by online marketing alone.