Online share hits record 27% fuelled by double-digit growth in search and display

A surge in FMCG advertising and a triple-digit increase in online video helped fuel a 13.5% like for like growth in UK internet advertising expenditure, and a half-year 2011 high of £2.26 billion.

The wider UK advertising sector experienced year on year growth of just 1.4% to £8.27 billion between January and June 2011. Internet spend has surpassed forecasts to reach a new market share of 27%, with a quarter of a billion pounds more spent on internet advertising in the first half of 2011 compared to the same period in 2010.

The figures, which exclude mobile advertising expenditure, are collated bi-annually by the Internet Advertising Bureau (IAB), the trade body for digital advertising, in conjunction with PwC and WARC.

Display advertising

Boosted by sophisticated new formats and 100% growth of online video, display advertising grew by 18.5% year on year on a like for like basis to £510 million, representing a 23% share of online spend in the first half of 2011 (£440 million and 22% share in H1 2010). A combination of direct response and an increased number of social media and brand campaigns delivered this growth.

Although banners and embedded formats still dominate online display (£374 million or 73% share), video doubled in size year on year to £45 million, giving it a 9% share of online display (5% in first half of 2010). This is due to a significant increase in advertisers using video to deliver brand messages.

Other forms of advertising

Paid-for search marketing continued to thrive as advertisers recognise its transparent and measurable benefits during these budget-pressured times. Year on year, search increased 12.6% on a like for like basis to £1,313 million, representing a share of 58% of online advertising (£1,164 million and 58% share in 2010).

Online classifieds grew 3% like for like to £385 million with a share of 17% of online advertising year on year (£379 million and a 19% share in the first half of 2010).

Lead generation, an increasingly important form of performance-based marketing where advertisers pay per sales lead rather than a click through or by an advertisement served, grew by 20% to £26 million (£22 million in H1 2010).