Internet outstrips TV but total ad spend plummets 17%

by Daniel Farey-Jones, Brand Republic 30-Sep-09, 09:15

Based on figures from the Advertising Association and WARC, a report from the IAB and PricewaterhouseCoopers shows that internet advertising was the only sector to grow in the first half, taking a total of £1.75bn.

The 4.6% growth in all forms of online advertising — paid-for search, display and classifieds — came within an overall market that fell 16.6% to £7.5bn.

Guy Phillipson, chief executive of the IAB, said: “Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions.”

TV revenues fell 16.1%, according to the figures, meaning it has lost its status as the medium with the biggest market share to the one that had the smallest share only six years ago.

Online now has a 23.5% market share compared to TV’s 21.9%.

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Phillipson said that online had overtaken TV around six months earlier than expected because of the recession, which has accentuated marketers’ search for certainty.

“The internet is the medium they are least likely to walk away from,” he said.

He predicted that marketers’ increasing exposure to the measurability of the internet would lead them to require greater measurability of other media. “The whole research industry will be working hard on that, to solve that conundrum, over the next few years.”

Eva Berg-Winters, online advertising expert at PricewaterhouseCoopers, said: “Perhaps surprisingly, a slowing economy has accelerated the migration to digital technology and hence the continuing shift from more traditional forms of advertising to online.

“The only certainty is that this transgression demands fundamental structural change of business models across all industries.”

Other media suffered greater revenue reverses than TV, notably print sectors. Press classified was worst off, down 37.3%, followed by directories, down 25%; outdoor, down 22%; and press display, down 20.4%.

However, press display is still the third largest sector with a market share of 18.5% and press classified has a market share of 11%.

If they were combined, as the online display and classified sectors are, they would have the biggest share of overall spend.

TV ad marketing body Thinkbox, issued a critical response to today’s figures.

Lindsey Clay, marketing director at Thinkbox, said  it was “interesting but meaningless to sweep all the money spent on every aspect of online marketing into one big figure and celebrate it”.

Clay said: “Online marketing spend is made up of many things including email, classified ads, display ads (including online TV advertising), and, overwhelmingly, search marketing.

“They should be judged individually.”

Clay added that TV was the most effective ad medium “pound for pound” and that it was even more effective when put together with online.

Clay said: “They are the perfect marketing marriage. To set them up in competition is a mistake and misses their complementary relationship.”

Source: http://www.brandrepublic.com/BrandRepublicNews/News/942055/Internet-outstrips-TV-total-ad-spend-plummets-17/?DCMP=EMC-DailyNewsBulletin