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The economy may not be great, but the internet isn't complaining. In fact, the economy has likely helped internet advertising achieve a significant milestone in the UK. According to the Internet Advertising Bureau (IAB), internet ad spend surpassed television ad spend for the first time ever anywhere in the world.

Total spending on internet ads in the UK hit £1.75bn in the first two quarters of the year, a 4.6% year-over-year gain. That's good enough to account for almost 24% of all ad spending. Television, on the other hand, now accounts for just 21.9% of ad spend following a painful 16.1% year-over-year decline.

While the growth of online ad spend has slowed considerably due to the economy, that more money is now spent on online ads than television in the UK is something many believed to be inevitable. Consumers are online and advertisers have a seemingly unlimited number of ways to reach out and interact with them via the internet. So it's no surprise that so much money has flowed to digital.

That said, the IAB's numbers make it clear that not all online ads are created equal. 60% of all online ad spend in the first half of 2009 went to search, which now tops £1bn. Online classifieds, which reaped a more modest £385, is one of the few areas still experiencing rapid, double-digit growth. The weakling of online advertising: display ads. Spending on them fell by 5.2%.

In the final analysis, the economic downturn is probably at least partially responsible for propelling online ad spend higher than television ad spend so soon. But the long-term trend was hardly in doubt and this milestone would have been achieved regardless. The big questions now:

  • How far can online advertising go?
  • What areas of online advertising will provide the greatest opportunity for rapid growth going forward?
  • When the economy recovers, how strong will television ad spending bounce back?

These are interesting times for advertisers, agencies and publishers/media companies. While internet advertising has achieved a significant milestone, I think everyone would agree that things are just getting started.

Photo credit: (A3R) angelrravelor (A3R) via Flickr.

Patricio Robles

Published 30 September, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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