Online advertising spending in the UK will pass the £1bn milestone this year, according to a report issued on Tuesday.
Online advertising revenues in the first half of 2005 rose to £490m, a rise of 62 percent compared with the same period last year, according to the report issued by the Interactive Advertising Bureau (IAB) in conjunction with PricewaterhouseCoopers.
The UK advertising industry as a whole experienced growth of just 3 percent compared with the first half of 2004, the IAB said.
Total online advertising revenue for the 12 months ending June 2005 was £864.6m, making it a near certainty that online will break the £1bn barrier by the end of 2005, according to the IAB.
Market share for UK Internet advertising rose to 5.8 percent compared with 5.1 percent for outdoor advertising, which includes billboards, posters, and backlit posters.
Online advertising also outstripped radio's 3.6 percent share of the market.
The half-year online revenue for 2005 was greater than the full-year total for 2003 of £407.8m.
The rise in online ad spending has been driven by record broadband uptake, improvements in the creativity of Internet advertising; and better targeting by advertisers, according to the IAB.
"Broadband is experiencing record take-up this year, which has fuelled Internet consumption and in turn attracted a greater share of advertisers' spend. Marketers are recognising the Internet's full potential and are actively diverting budgets into online advertising," Guy Phillipson, chief executive of the IAB, said in a statement.
Broadband take-up has more than doubled in the past 12 months with over eight million homes now connected. Broadband users typically spend more time and money online than dial-up users.
Innovations in technology have given also more opportunities to advertisers; video streaming, personalisation, interactive formats and localised search are all attractive to marketers, the IAB said.
Marketers are starting to better understand the dynamics of online advertising to selective consumers, according to an IAB spokesman who said that "advertisers are seeing returns on their initial spend and are increasing their budgets."
