IAB/PwC data shows continuing growth in online ad spend

The latest stats from the IAB / PwC Internet spend report show that the online advertising market is now projected to hit £3.2bn in 2008. In the first 6 months of the year, £1,682.5m was spent on online advertising. Like for like, this is up 21% year on year.

This is continuing the phenomenal growth trend that online has seen over the last 5 years. However, there is a sign that the market is starting to mature. Like press and TV, online appears to have a seasonal effect. Q2 is relatively weaker than Q1, as Q1 is strong on travel (January gloom leading to holiday bookings), autos (new registration period) and finance (end of the fiscal year).

In Half 1 of 2008, 18.7% of the UK advertising market was taken up by online spend. This is up 4 percentage points in a single year – quite a significant shift. It can only be a matter of time before online overtakes display press and TV.

However, a note of caution must be made here. Online is essentially four media in one. Press spend is split out by classified and display, so surely Internet should be split out into search, classified, display and solus email. If it were, the share graph would be modified to look like the below (solus email is accounts for less than 0.1% and so is omitted).

(Click through for the bigger version. Apologies to the IAB for messing with their chart)

This is by no means meant to detract from the massive growth in online spend. Aside from cinema, online is the only media that saw an increase in spend in H1. If online growth had been static (and ignoring any substitution effects), the advertising market would have fallen by 4.6% rather than 0.7%.

The full presentation can be found here, but is restricted for members only. The press release available to all is available here (pdf link opens in a new window).

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