Online adspend growth halved in 2008

by Fiona Ramsay, Marketing 07-Oct-08, 08:30

LONDON - Growth in UK internet advertising has slowed considerably in the first half of 2008, returning a 21% year-on-year increase - just over half the rate post-ed in 2007.

Figures from the Internet Advertising Bureau and PricewaterhouseCoopers show that online adspend over the period was £1.68bn, boosting the sector's share of UK adspend by 4% to 18.7%, compared with TV's 21.7% .

However, brands are continuing to apportion the lion's share of their budgets to TV. According to Nielsen, between January and June, Unilever and Procter & Gamble invested just 1% of their media budgets in online, compared to the 59% and 69%, respectively, which they invested in TV.

Of the top 15 advertisers, seven spent less than £500,000 online in the first half of 2008.

Despite overall display spend growing 16.3% to £333.8m, the category's share of internet spend fell from 21.5% to 19.8%.

Spend on search rose 28% to £981m, with brands focusing on sales conversion as the economic situation worsens. However, search held its share of total online spend at about 58%, suggesting that it has reached maturity.

Dan Clays, managing director of BLM Quantum, expects a further slowing in the second half of 2008. 'Is is a time to scrutinise digital strategy, rather than viewing more online investment as a solution,' he said.