This year has seen UK agencies and brands allocating significantly more cash to viral marketing, as well as spending it “more intelligently”, according to a new survey.

The research, by Kontraband, found growth of up to 60% in output in the first seven months of 2007, compared to the same period last year.

It gathered the data from six viral agencies – The Viral Factory, Woot Media, Maverick Media, Inbox Digital, Skive and DBM Pulse – as well as using its own figures.

While viral has largely been seen as an afterthought in media planning, the study found more brands have been willing to employ it this year, such as Lloyds TSB and HSBC.

As a result, the report says agencies’ production output has risen by an average of 40%, while production budgets have increased by an average of 30%. Kontraband says viral seeding campaigns have jumped 67% so far this year.

The agency predicts the viral industry as a whole will be worth between £25m and £30m by the end of 2007.

Richard Spalding, MD of Kontraband said:

“This has been a fantastic growth year for viral marketing, we’re really starting to see a more mature approach by brands as they realise that viral can communicate effectively and efficiently with their target audience.”

Austen Kay, MD of Woot Media added:

“Media agencies aren’t just buying more viral campaigns, they’re buying them more intelligently. There is a growing realisation that great creative will disseminate very quickly through social networks when seeded on the right blend of entertainment sites, blogs and forums.”

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Interview with Richard Spalding of Kontraband