Advertisers shift from TV to the web

Internet ad spending is expected to reach £3.56bn this year

The internet is set to become the UK's biggest advertising medium, accounting for almost a fifth of ad spend this year, according to analyst firm Enders.

Paid search is the main driving force behind an expected 26.4 per cent increase in internet ad spending, taking the total figure to £3.56bn.

The increase has come at the expense of TV advertising, which the analyst firm expects to fall by 2.5 per cent to £3.39bn this year.

Unsurprisingly Google is the chief beneficiary of the growth in the popularity of paid search, accounting for 80 per cent of total internet advertising expenditure.

The figure represents two per cent growth on the search giant's overall 78 per cent share of internet advertising in 2007.

While Google continues to take the lion's share, Enders believes that growing interest in online video is also contributing to the shift in advertising from TV to the web.

"We estimate that online video advertising will amount to about £35m, or one per cent, of TV ad spend in 2008," the report claims.

"Not all this money will come from TV budgets, but there are early signs of a direct shift in spend from TV to the internet over and above the broader shift to online.

"Our forecast for 2008 is that online advertising expenditure will grow 26.4 per cent in nominal terms to £3.56bn, overtaking TV ad spend which we expect to fall 2.5 per cent to £3.39bn."

However, online classified advertising, which jumped 54 per cent in 2007, is expected to fall off over 2008 as declines in recruitment and property listings begin to bite.