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Figures released today from the IAB show that UK online display advertising spend has surpassed £1bn for the first time, marking 13.4% growth for 2011.

This was included in the association’s bi-annual report, conducted by PricewaterhouseCoopers (PwC) which also states that total internet adspend has grown 14.4% to £4.8bn in 2011, up £687m year on year.

Strategy manager for PwC Anna Bartz said that this year’s results reflect the continued appeal of digital media – on desktop, mobile or tablet – to advertisers for both brand advertising and direct response.

All formats grew, with strongest increases in video and social media, and in search. Internet adspend's 14.4% growth is exceptional when compared to an estimated advertising growth of less than 2% across all media in 2011.”

Other highlights are as follows:

  • UK e-commerce helped the retail sector see the biggest overall growth in the second half of 2011, as it became the third biggest display advertiser. FMCG moved to second place, while Finance just held on to top spot.
  • Online video ads doubled year on year to £109m (£54m in 2010). The format has grown more than eight-fold since 2008, when video spend was just £12m. Video ads now account for 10% of all online display advertising, with 40% of marketers planning to use online video to increase brand awareness in next 12 months.
  • Banner ads on social media platforms increased by 75% to £240m – an eight-fold increase since records began in 2008. 
  • Search marketing grew 17.5% to £2.767bn (£2.346bn in 2010) with a 58% share of online advertising spend (57% in 2010). In comparison, Econsultancy’s SEO Agencies Buyer’s Guide, published last month, states that the UK SEO sector is now worth over £500m annually. Econsultancy analysts estimate that the market grew by 18% over 2011, reaching an end of year value of £514m, compared to £436m at the end of 2010. The valuation, contained in the 2012 SEO Agencies Buyer’s Guide, includes payments to agencies as well as investment in client-side staff to manage SEO and implement changes.
  • Classified ads grew 5.2% to £785m (£751m in 2010) with a share of 16% (18% in 2010). Consumer and B2B classifieds (property, cars, holidays and B2B) reached the half billion milestone for the first time with £509m (£485m in 2010).
  • Mobile rose by 157% in 2011 to a new high of £203m. 

The IAB doesn’t cover 2012 predictions in its report, though Warc released figures in February that suggested The Olympics will help drive a 4.2% increase in UK adspend in 2012 compared to 2011. 

This is a reminder that the online advertising space is buoyant, something supported by the million-dollar pricetag on YouTube’s new channel ad model as revealed yesterday. 

The industry looks healthy, and these figures are only based on companies that submitted data for 2010’s reports so as not to skew results, but as always should be taken with a pinch of salt.

Vikki Chowney

Published 3 April, 2012 by Vikki Chowney

Vikki is head of community at TMW. You can follow her on Twitter or Google+

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