Online spend soars to £1.4bn

The rapidly growing online advertising market has the third-largest traditional media sector - national newspapers - firmly in its sights after spend reached £1.4 billion in 2005.

The Internet Advertising Bureau chief executive, Guy Phillipson, predicted £2 billion would be achievable within the next 12 months, an increase that would see online adspend overtake national newspaper spend.

The figures, published this week by the IAB, PricewaterhouseCoopers and the World Advertising Research Centre, equate to a 7.8 per cent market share and reflect growth of 65.6 per cent. The IAB says this increase is driving the overall ad market.

Advertising across all other media fell by almost £200 million in 2004, according to the research, but the growth in online meant overall adspend increased by 2.5 per cent.

Paid-for search marketing saw the biggest growth over the 12 months, up 78.8 per cent to £764.4 million. Online classified advertising was up 62.4 per cent to £262.2 million, boosted primarily by automotive and recruitment.

Online display was up by 44.2 per cent to £334.9 million, with the increased use of rich media such as audio, video and animation driven by take-up of broadband.

Phillipson said a further 40 per cent increase in 2006 - the growth required for £2 billion to be reached - was "perfectly possible given current trends".

He added: "This is explosive news for all media. Online has grown by two-thirds every year for the last three years and with extra investment from consumer goods and retail clients, we'd certainly hope to reach that (£2 billion) milestone."


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