UK online ad spending will pass TV this year

Jordan Golson — Tue, 17 Jun 2008 11:27:10 -0700

Score one for new media. The Internet will receive the largest share of advertising dollars in Britain this year, beating television for the first time. The prediction, by Enders Analysis in the UK, cites paid search and online video as the primary drivers of ad spending.

Digital will receive a 19 percent share of ad spending at £3.56 billion compared to a predicted £3.39 billion for television. This equates to a more than 26 percent rise in online spending year-over-year.

Unsurprisingly, Google will grab most of the money spent on search advertising -- upwards of 80 percent in Britain, which Reuters called the "most developed online advertising market" worldwide.

Britain is different from the United States in that some of the most popular broadcast channels -- the various channels of the British Broadcasting Corporation or the BBC -- are publicly funded via taxes. As a result, the BBC channels don't have traditional advertising and this lowers the total ad spend on television in the country, making it potentially easier for digital spending to surpass TV.

In addition, the BBC recently launched its online video solution iPlayer to great fanfare. IPlayer allows British Internet users to view a wide variety of BBC shows on-demand directly from their computer. This widespread and well-publicized online video initiative could help drive acceptance and overall consumption of online video in the country -- and help drive advertising dollars online.

The Reuters report quoted an analyst as saying "there are early signs of a direct shift in spend from TV to the Internet over and above the broader shift to online."

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