Online Ad Market Holding On in Britain

The total U.K. Internet advertising market for the first half 2001 was £90.2 million, a 42 percent increase over online ad spending from one year earlier, according to the Interactive Advertising Bureau UK and PricewaterhouseCoopers.

Making the online ad growth more impressive is the fact that Internet advertising was the only advertising sector to show double-digit growth when compared to the first six months of 2000. The majority of advertising sectors are contracting, but online advertising is performing better than the sector average. The U.K. online market also performed ahead of U.S. market, where revenues fell by 8 percent.

“Effective targeting and the unparalleled accountability of online are further reasons why advertisers are continuing to move their spend into the sector,” said Danny Meadows-Klue, chairman and chief executive of the U.K. IAB. “As budgets tighten, online lets them plan with precision accuracy how to deliver and monitor campaigns. The medium has risen to the challenge of tracking return on investment.”

Banners continue to represent the largest component of advertising revenue and still generate the most revenues. But there is real development of additional media formats such as tenancies, nested content, interstitials and sponsorships.

By sector, there are significant changes in spending patterns with Automotive, FMCG, Financial Services and Retail relatively strong, while Entertainment, Media, Technology and Telecom advertising lost market share. This pattern also mirrors the U.S. market.

Leading publishers and ad networks continue to dominate U.K. market share as Internet advertising remains concentrated on top publishers and ad networks. The 10 largest publishers and ad networks continue to command 89 percent of total market share.

Britain, Italy, Germany, Spain and France account for 80 percent of the European online advertising market, according to LemonAd. Britain should be the second largest market in Europe for per capita online ad spending in 2001 ($6.86), trailing only Scandinavia ($10.86) and ahead of Germany ($5.11).

The online advertising market across Western Europe is expected to reach 1.2 billion Euros in 2001 according to Jupiter MMXI. It will be worth 1.7 billion Euros in 2002, 4.2 billion Euros by 2006.

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