Full year internet adspend figures for 2005 from the IAB and PwC.
Total UK online advertising expenditure in 2005 has surpassed all initial expectations by growing 65.6% year on year to £1,366.4 million (£1.4 billion). These record breaking results have taken internet advertising’s market share to 7.8% according to the results of the Internet Advertising Bureau’s bi-annual study, carried out in partnership with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC).
The growth of online marketing in 2005 was so dramatic that it drove the growth of the entire media market. All other advertising media combined actually fell by almost £200 million year on year, but the rapid increase in online marketing expenditure ensured that the market as a whole still recorded a 2.5% increase in 2005, compared to 2004.
This terrific performance by internet marketing was not restricted to one particular format either. Each of the primary online advertising disciplines - display, classifieds and particularly search - grew substantially in 2005 to generate a combined annual growth in excess of half a billion pounds:
- Display increased by 44% or £103 million year on year as advertisers took advantage of the increased connection speeds of broadband, to create powerful rich media campaigns
- Online classifieds continue to be recognised as an immediate and convenient tool for buyers and sellers, increasing 62.4% or £100.8million year on year. This growth was primarily driven by the recruitment and automotive sectors and at the expense of traditional press classifieds, which fell 5.1% in the same period
- Search recorded the biggest increase - 79% or £338.7 million - of all online advertising formats as advertisers in 2005 recognised the benefits of search and used its many tools for both direct response and brand-building initiatives.
In terms of the best performing industry categories in the second half of 2005, it was again Recruitment that spent the most, representing 22.1% of the total market. Finance and Automotive followed accounting for 17.4% and 12.4% respectively. It was the Entertainment sector, driven by broadband powered video-streaming and sophisticated rich media that recorded the most significant growth in the second half of last year – worth 10.2% of spend in 2005 compared to 6.2% in 2004.
