PaidContent: "UK Online Ad Spend Reached £3.3 Billion in 2008, But Growth Is Halved"
This morning PaidContent.org reported on the state of the online advertising sector. It could be summed up as under pressure, but you should see the other guys
"Online was the fastest-growing advertising sector in 2008, but its rate of growth has decreased by more than half. That's according to the latest quarterly figures from the World Advertising Research Centre, compiled for the Advertising Association, which found that online ad spend grew to £3.3 billion in 2008, a 17.3 percent rise year on year—compared to a 39.5 percent year-on-year increase in 2007. That figure is a little below other analysts' estimates of 2008 digital ad spend: Enders Analysis put it at 20 percent and Zenith Optimedia cut its forecast to 21.2 percent."
Other results:
Overall ad spend across all sectors dropped 3.9 percent last year, which contrasts starkly with the 4.6 percent increase in 2007. And things are getting worse, not better: Q408 ad spend dropped 9.6 percent overall, according to WARC.
Print crashes: Newspaper ad spend dropped 12 percent in 2008 to £4.1 billion according to WARC while magazines were down 9.9 percent. Newspapers were down just 0.3 percent in 2007, year on year.
TV suffers: TV advertising was 4.9 percent down in 2008 at £3.8 billion, compared to a 2.8 percent rise in 2007, a figure reflected in disastrous full-year earnings from ITV in which the commercial broadcaster admitted a £2.7 billion loss.
Radio worse: ad spend dropped 8.5 percent to £454 million last year, having risen 3.4 percent in 2007.
Market share in 2008: The AA gives newspapers the biggest share of advertising spend at 25 percent, with 23 percent—but online is close behind with 20 percent. In 2007 online had a share of just 15.6 percent and has steadily eaten away at the dominance of the press, which in 2007 enjoyed a 39.8 percent share.
Summary
Online is holding up in the face of a tsunami of bad news. The fall in online ad spend is likely to continue but if you scratch the surface there are some interesting changes. Search advertising remains buoyant; any drop is caused by some sectors like autos and travel reducing their spend. Ad spend is starting to migrate away from the huge portals like Yahoo to more specialist websites. There is a general move towards 'paid on results' marketing including affiliate and CPA. This shift will continue during the recession.
TalkContent is a site for those that are passionate about creating content. Whether you're a blogger, a website owner or a large online magazine publisher, this is the site for you.
