Online ad spending up 40%, overtakes direct mail

The IAB’s online ad spending figures for the first half of the year are out, and show a gain of 41.3% to a half-year record of £1.33bn.

Online now accounts for just under 15% of the total ad market in the UK and could reach £2.75bn this year, according to the group.

It passed £2bn for the first time last year.

Guy Phillipson, chief executive of the IAB, said:

"The online market is developing at an astounding rate and once again we see exceptional growth and a significant increase in market share. Ninety percent of internet users are on broadband now and nearly 40% are using wireless.

"We’re also seeing women and the over 50s spending far more time online, which makes the internet a very attractive medium to a broader set of advertisers.”

Other stats from the research, conducted by PwC and the World Markets Research Centre, show:

• Online ad spending is now higher than direct mail expenditure, which the IAB says has a market share of 11.8%.
  
  
• The total ad market grew 3.1% in the six months to £9.1bn, but would have fallen if it weren’t for online’s contribution.
  
  
• Classified advertising online was the star performer - it increased by 72% to £277.7m and now accounts for over a fifth of the internet ad market.
  
  
• Display advertising grew 33% to £287m.
  
  
• Paid search was up 44% to £762.3m - 57.1% of total online ad spending.
  
  
• Recruitment was still the top category with 24.7% share, followed by automotive, which overtook finance to take second spot with 12.5%. Finance had 11.7%; telecoms had 6.7%; and property had 5.7%.
  
  
• Interestingly, the business and industrial category more than doubled to 3.1%.

Related research: 2007 Search Engine Marketing Buyer's Guide

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