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UK firms splash even more cash on online ads

Videos and search adverts do well despite downturn

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Despite eurozone woes, volatile markets and double-dip recession fears, online advertising continues to climb in the UK, according to a report on the first half of 2011.

The UK's online ad spend grew 13.5 per cent to £2.26bn, the Internet Advertising Bureau (IAB) said, adding that digital advertising now accounted for a record 27 per cent of all cash spent on adverts in the country.

Overall, the advertising sector – usually the first place beancounters make cuts in a downturn – managed growth of just 1.4 per cent year-on-year despite companies splashing an extra quarter of a billion pounds on internet advertising in the first half of 2011 compared to 2010. And that's not even including mobile ad spend.

One of the main factors is the massive growth in video adverts, which now form a 9 per cent share of the £510m online display advertising market.

"Although banners and embedded formats still dominate online display (£374m or 73 per cent share), video doubled in size year-on-year to £45m," the bureau said in a canned statement.

Watching video online is a growing pastime for Britons, according to figures from the Nielsen Video Census quoted by IAB, which show that 26 million people watched 2.3 billion videos for a total of 266 million hours in June 2011 – an average of 88 videos per person.

Faster broadband, a growing online audience and the UK's fascination with social media are all helping to push advertisers online as well. A quarter of the time spent online in the country is taken up with social networks, according to Nielsen.

“The spectacular growth of video and social media powering brand display is key to online achieving a record share of 27 per cent," said Guy Phillipson, chief exec of the IAB.

“With direct response advertising also thriving in the current climate, online offers a potent combination for all marketers, and the indications are that double-digit growth will continue in the UK,” he added.

Aside from investing in video, paid-for search marketing is still a popular choice for brands, with search ads increasing 12.6 per cent to £1.3bn, 58 per cent of all online advertising. ®

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