Britain Says 'Cheers' for Online Adverts

JULY 3, 2007

The old guard is changing, and fast.

If your impression of Britain is a bloke in a bowler hat, think again. Far from being set in its ways, the UK is becoming a model for the future of advertising around the world.

In fact, Britain is set to account for over half of all online ad spending in Western Europe this year. That share will rise to 52.6% of regional online spending by 2011 — amounting to nearly £4.5 billion ($8.2 billion).

"Several recent developments, including Google's planned acquisition of the ad-serving company DoubleClick and Microsoft's announcement that it hopes to buy aQuantive, another player in the advertising sector, signal a radical transformation of online advertising," says Karin von Abrams, eMarketer Senior Analyst and the author of the new report, UK Online Advertising. "The UK will be in the vanguard of this change."

The health of the UK economy will continue to provide a firm underpinning for online advertising in Britain. Today, few advertisers remain unfamiliar with digital media, and both new and established brands increasingly have the funds, the will and the agency partners to invest confidently in online campaigns.

"Several sectors will drive the UK online advertising market between now and 2011," says Ms. von Abrams, "such as paid search, social networks, mobile platforms, rich media and personalization."

The importance of the rise of Internet spending is difficult to overemphasize.

With the rate of advertising growth declining, and Britain's share of world spending also diminishing, the growth of the online marketplace has made a remarkable contribution to the UK's advertising landscape, and given an enormous boost to spending overall.

Data from the Advertising Association and GroupM illustrate the impact of online spending dramatically — and projections for 2007 show the trend continuing.

The rate at which online spending is growing against spending in all other media is easing somewhat, however.

Recent projections by ZenithOptimedia anticipate that online advertising will account for 16.6% of the total in 2007 — a less optimistic estimate than the 18% calculated by GroupM — and will forge ahead to claim just under 23% in 2009.

"A world transformed by the convergence of browsing, searching and ad-serving technologies isn't here yet," says Ms. von Abrams. "In the meantime, in Britain traditional display formats remain central to the online marketplace, even as more complex types of messaging and interaction emerge."

To get more of a peek into the future, read the new eMarketer report, UK Online Advertising.