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Online Spending Passes TV in UK

Cause to celebrate

October 7, 2009 | Media Buying

Online ad spending has been fortunate in the economic downturn—recession-resistant due to its high level of accountability, Internet ad revenue growth has remained positive as spending in all other media dropped.

In the UK, the effect has been so dramatic that online took the biggest slice of advertising revenues in the first half of 2009. Research from the Internet Advertising Bureau UK (IAB UK), PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC) put online revenues at 23.5% of the total from January to June, 1.6 percentage points ahead of TV.

UK Advertising Revenue Share, by Media, First half 2009 (% of total)

This makes the UK the first major economy to see online spending overtake television.

“Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions,” said Guy Phillipson, chief executive of the IAB UK, in a statement. “Online display has performed notably well against its peers in TV, print and radio despite more than £1.5 billion being wiped off the advertising industry.”

Paid search led online growth, while spending on display ads and classifieds fell.

UK Online Advertising Revenues, by Format, First half 2006-First half 2009 (millions of £)

Interestingly, the UK TV lobby is fighting back. Lindsey Clay, marketing director of industry body Thinkbox, told The Guardian that it is “meaningless to sweep all the money spent on every aspect of online marketing into one big figure and celebrate it. Online marketing spend is made up of many things, including e-mail, classified ads, display ads (including online TV advertising) and, overwhelmingly, search marketing. They should be judged individually."

“Of course online encompasses a wide range of formats and approaches,” commented Karin von Abrams, eMarketer senior analyst. “And the UK is a unique market, where—thanks to the BBC—a large portion of TV broadcasting is not ad-supported.

“But few interactive marketers will want to forgo the celebrations,” Ms. von Abrams continued. “The UK has been especially hard-hit by the global recession, and the pace of recovery is still uncertain. Online advertising is rightly credited with saving the UK ad industry from meltdown in this difficult period. These Internet spending figures will also give advertisers renewed confidence, and encourage further investment in online strategies.”

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Check out today’s other article, “Behavioral Targeting Misses Mark.”



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