UK Online Advertising Strides On

UK online advertising is still going strong.

The UK leads Europe in terms of total online advertising spending. The total rose by over 30% in 2007 and it will rise another 27% in 2008.

Moreover, online advertising spending in the UK will continue to show double-digit annual growth through 2010, and will approach £5 billion ($8.7 billion) in 2012.

”Global financial turbulence is putting the brakes on advertiser spending to some degree everywhere,” says Karin von Abrams, eMarketer Senior Analyst and author of the new report, UK Online Advertising: Reaching Maturity, “but online advertising should hold its own in the UK, and may even consolidate gains over other media during the economic pinch.”

In its breakdown of spending in the UK’s media and marketing channels, GroupM estimated that the Internet accounted for £2.3 billion in 2007, or 18.3% of all advertising spending.

Because expenditure on TV advertising may actually fall, GroupM predicts that spending on online advertising in the UK will overtake spending on TV ads as early as 2009.

”If eMarketer’s online spending projections are nearer the mark, it may be 2010 before TV loses its top spot in the UK pecking order,” says Ms. von Abrams. “Either way, it seems inevitable that this milestone is not far off.”

Compared to the rest of Europe, the UK’s high online advertising numbers mean that the country punches above its weight in terms of spend per Internet user.

PricewaterhouseCoopers (PwC) and IAB Europe calculated that in 2006 online advertisers in the UK spent €104 ($131) for each of the country’s 35 million Web users—almost twice the €54 ($68) spent in Germany, and 215% higher than per-user spending in France.

“As Web commerce becomes the norm in most of Europe, the UK’s larger neighbors are building sophisticated online industries tailored to national markets,” says Ms. von Abrams. “In a few years, the UK may see other countries vying for top rank in the spending league.”