According to figures released by the IAB today, carried out in conjunction with PricewaterhouseCoopers, online advertising in the first half of 2005 rose by 62.4% on the same period last year to £490.8m.
Its share of the overall ad market rose to 5.8%, pushing it ahead of outdoor, which accounted for 5.1% of the market. Online advertising had already overtaken radio's market share last year.
The figures reveal that the online advertising market in the past six months is worth what the entire spend was in 2003.
The rise, which is ahead of industry expectations, has been driven by record broadband uptake; improvements in the creativity of internet advertising; and better targeting by advertisers.
Guy Phillipson, chief executive of the IAB, said: "These results have surpassed our expectations. At the end of 2004, the IAB predicted online would overtake outdoor by mid 2006 and we've beaten this target. Now the internet looks certain to be a £1bn medium in 2005."
Phillipson said that the record spend was a sign that marketers were seeing the real potential of online ads.
"Broadband is experiencing record take-up this year, which has fuelled internet consumption and in turn attracted a greater share of advertisers' spend. Marketers are recognising the internet's full potential and are actively diverting budgets into online advertising," Phillipson said.
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