Online ad spend tops £1.6bn in first six months of 2008

LONDON - Online ad spend increased by 21% to £1.68bn in the first half of 2008, according to the Internet Advertising Bureau.

Philipson: positive about growth
Philipson: positive about growth

Guy Phillipson, IAB chief executive, said he was positive about the sector's growth prospects, attributing the accountability of online advertising as a key factor in persuading clients to increase their investment in the medium.

Phillipson said: "Online is not immune from the economic downturn, but the growth in advertising spend is healthy as advertisers focus on efficiency and to maximise their budgets."

With a year-on-year increase of 28%, paid search continues to drive online ad spend growth and was worth £981m during the first half of 2008. Its market share was marginally up to 58.3% of total online advertising, compared to 57.8% in the first half of 2007. However, the growth in overall ad spend has slowed. Between January and June 2007, online ad spend increased by 41.3%, but slowed to 21% during the same period this year.

Dan Clays, managing director at BLM Quantum, emphasised that figures from the second half of the year will give a more telling view of the online sector's performance.

"In the first half, we saw clients feeling confident about digital after the previous year's growth, but in the second half of the year we will see reaction to the fact that digital is not immune to changes in the economic climate," Clays said. "There's such a broad range of how to use digital that clients need to focus on the most efficient and cost-effective ways."

Total spend on online display advertising rose 16.3% to £333.8m during the first half of 2008, boosted by a 36.6% increase in spending on embedded formats including rich media, banners and video.

By sector, technology was the biggest-spending online category with a 17.3% market share, followed by finance at 11.9%, entertainment and media at 10.7% and recruitment at 9.9%.

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