Online advertising market ignores the recession

Online ad spending has overtaken traditional television ads for the first time

Online advertising is proving immune to the recession, according to the latest report from the Internet Advertising Bureau (IAB).

New figures compiled by the IAB, PricewaterhouseCoopers (PwC) and the World Advertising Research Centre suggest that online advertising spending grew by 4.6 per cent in the first half of this year, and has overtaken traditional television ads for the first time.

Online expenditure rose to £1.75bn, and now represents 23.5 per cent of the overall advertising market. These are record figures in an industry that actually contracted by almost 17 per cent over the period.

"Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions," said Guy Phillipson, chief executive of the IAB.

"Online display has performed notably well against its peers in TV, print and radio, despite more than £1.5bn being wiped off the advertising industry. 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."

Paid-for search is increasingly winning favours with advertisers, according to the report, and accounts for about 60 per cent of all online advertising expenditure.

Marketers have thrown a huge £1.05bn at this form of advertising, representing 59.8 per cent of their total online advertising expenditure. Technology ads see the most spending and account for 19 per cent of the market, telecoms are second with 14 per cent, and finance third with 13 per cent.

"Perhaps surprisingly, a slowing economy has accelerated the migration to digital technology, hence the continuing shift from more traditional forms of advertising to online which promises return on investment and measurability in a period of instability," said Eva Berg-Winters, online advertising expert at PwC.