Online advertising has sustained the recent growth trends for the first half of 2008 despite the turmoil entrenched within many economies throughout the world, accounting for £1,682.5 million in expenditure. The Internet Advertising Bureau reported a 21% year on year increase, showing great strength and confidence in the online medium while TV, Outdoor, Press and Radio all saw falls in expenditure.
Search marketing maintained its position as the strongest online format with 28% year on year increase in 2008, rising to £981 million and holding a market share of 58.3%. The power and reach of paid for search has led to this format becoming indispensable for companies looking to run any form of advertising campaign.
The turbulence created by the recent downturn in the global economy has increased the need to focus on customer retention, which in turn has caused an increase in spend on display advertising in an attempt to engage customers and generate brand awareness. The increase was primarily due to a 33.6% increase on formats such as banners, rich media and video content.
Guy Phillipson, chief executive officer of IAB UK, said of clients using online advertising: “They are also increasing their investment in paid-for search marketing because it delivers measurable returns on investment.”
As every firm looks to make every penny spent earn a return, online advertising looks set to ride out the global instability by being able to demonstrate where every portion of a client’s budget has been allocated and the returns generated. Online activity is much more measurable than other mediums and therefore represents an attractive option for tight client budgets.
Various factors have driven this growth in online advertising; primarily the growth of the online audience throughout the UK, with 31.6 million people now able to access the internet. This access has also dramatically improved over recent years, with 58% of UK households now possessing broadband connections. Therefore there is a huge amount of people with fast and constant access to the internet. Development of mobile access has also increased the audience available to marketers, through the development of 3G, wireless access and Android by Google. During 2007 alone, the amount of 3G connections increased by 60% as tariffs became cheaper and more attractive to users.
Strong growth is also expected from advertising on social networking sites as these sites continue to enjoy an increasing user base. This will add up to a huge opportunity for companies to gain access to potential customers through very specific targeting.
Overall, the online medium looks set to fare much better than other forms of media as clients look to ensure that every share of their marketing budget is producing a measurable return.