Internet outstrips TV but total ad spend plummets 17%

by Daniel Farey-Jones, Brand Republic 30-Sep-09, 09:15

LONDON - Internet ad spend has overtaken TV for the first time but total UK spend fell by £1.5bn in the first half of 2009, compared with the same period last year, according to figures released by the IAB today.

Based on figures from the Advertising Association and WARC, a report from the IAB and PricewaterhouseCoopers shows that internet advertising was the only sector to grow in the first half, taking a total of £1.75bn.

The 4.6% growth in all forms of online advertising -- paid-for search, display and classifieds -- came within an overall market that fell 16.6% to £7.5bn.

Guy Phillipson, chief executive of the IAB, said: "Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions."

TV revenues fell 16.1%, according to the figures, meaning it has lost its status as the medium with the biggest market share to the one that had the smallest share only six years ago.

Online now has a 23.5% market share compared to TV's 21.9%.

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Phillipson said that online had overtaken TV around six months earlier than expected because of the recession, which has accentuated marketers' search for certainty.

"The internet is the medium they are least likely to walk away from," he said.

He predicted that marketers' increasing exposure to the measurability of the internet would lead them to require greater measurability of other media. "The whole research industry will be working hard on that, to solve that conundrum, over the next few years."

Eva Berg-Winters, online advertising expert at PricewaterhouseCoopers, said: "Perhaps surprisingly, a slowing economy has accelerated the migration to digital technology and hence the continuing shift from more traditional forms of advertising to online.

"The only certainty is that this transgression demands fundamental structural change of business models across all industries."

Other media suffered greater revenue reverses than TV, notably print sectors. Press classified was worst off, down 37.3%, followed by directories, down 25%; outdoor, down 22%; and press display, down 20.4%.

However, press display is still the third largest sector with a market share of 18.5% and press classified has a market share of 11%.

If they were combined, as the online display and classified sectors are, they would have the biggest share of overall spend.

TV ad marketing body Thinkbox, issued a critical response to today's figures.

Lindsey Clay, marketing director at Thinkbox, said it was "interesting but meaningless to sweep all the money spent on every aspect of online marketing into one big figure and celebrate it".

Clay said: "Online marketing spend is made up of many things including email, classified ads, display ads (including online TV advertising), and, overwhelmingly, search marketing.

"They should be judged individually."

Clay added that TV was the most effective ad medium "pound for pound" and that it was even more effective when put together with online.

Clay said: "They are the perfect marketing marriage. To set them up in competition is a mistake and misses their complementary relationship."

Comments

Robert Frost - 30/09/2009

It was only a matter of time! The next big milestone will be ad revenue delivered to mobile devices outstripping pc's.

Dave Sandham - 30/09/2009

All forms of media should be working together to increase the efectiveness of ad campaigns, rather than fighting about who has the biggest or best medium. A bit of everything is almost always going to be the best marketing mix!

Aaron Savage - 30/09/2009

You are right that it was only a matter of time Robert but it is still a red letter day. TV now for the first time will have to get used to being the second biggest player in media. Dave I'm certainly not going to argue against the effect of the media multiplier with you but this shows that a fundamental shift of focus has happened and one which I suspect is going to have some pretty far reaching consequences avross the whole of media.

Robert Frost - 30/09/2009

Not just 2nd biggest - according to the article TV is third biggest - Print is first and Online 2nd. I barely see any print advertising myself any more as I read the news on The Internet, but I know this is not true for everybody.

TESS ALPS - 30/09/2009

Hello. Thinkbox here. I'd like to make clear that Thinkbox is not questioning the IAB's own numbers. We simply want to add some context to their story on three points. Firstly, the IAB has used only TV spot advertising revenue for comparison when they themselves aggregate every possible form of online marketing, including online TV. Secondly, online's growth is not at the expense of TV advertising as the story implies; broadcast TV in fact is also increasing its share of total advertising and, by an even bigger rate, its share of display. Last year, TV advertising declined by 2.9% according to Ofcom, against a total advertising decline of 4.2% and a display decline of 5% according to WARC. Even in its own press release, the IAB has said that TV spot advertising declined by 16.1% in the first half of 2009 against a total decline of 16.6%, so again modest share growth and that's before we look at the other commercial revenues. Finally, TV has never been the biggest advertising medium; print remains the leader. However TV is now the biggest display advertising medium having overtaken print display a few years ago. We didn't make a fuss about it at the time. Given that online TV advertising is the fastest growing part of online display – again according to the IAB – we expect that position to be maintained.

Propeller Mobile - 30/09/2009

Loving Thinkbox's "zero tolerance" PR strategy. Should be entered for PR Week Awards \(have to be next year now)

Kristy Bourne - 30/09/2009

Working for an agency that's been helping to develop online advertising for clients, it's really interesting to see how brands are pushing into online advertising more. This is a huge jump for online advertising, which was the smallest ad earner just a few years ago, but not one which will mean TV or print advertising is blown out of the water. Each medium has its place and it is up to agencies and companies to ensure they use the right ones to reach the right target audiences. I'm excited about seeing the integration of advertising channels.