Media News

Online ad spend for 2008 finished at £3.5bn, a year on year increase of £537m. Paid search accounted for the largest percentage of online ad expenditure at 59.3%, followed by Classifieds at 21.4% and Display at 19.0% (Source: IAB). Despite the downturn in economic growth and the knock-on effect of the credit crunch, the early forecasts for 2009 suggested that whilst traditional media would decline across the year, online spend would remain constant, resulting in further share of the UK advertising spend.

However, the view at the beginning of the year appears to have been over-optimistic as recent predictions from IAB Europe, among others, indicate that online display advertising for 2009 will decline for the first time in 8 years, dropping by around 4%. But on a brighter note, they also forecast a 3% increase in 2010, so watch this space!

Search advertising is predicted to grow by 3% in 2009, and 4% in 2010. This growth will help to protect the overall decline in online ad spend this year, bringing the combined online ad spend fall to just 0.4%. There is a positive outlook for 2010, however, with expected growth of 2.4%.

Traditionally used as an information source for consumers, the internet has struggled to win brand budgets over other forms of media such as TV, Press and Radio. As illustrated in the 2008 ad spend figures, classified advertising online was still generating more revenue than display advertising last year. The economic climate hasn’t helped online display advertising in 2009 and, in Scotland in particular, we’ve seen fewer advertisers using the internet as a brand-building tool. However, a significant shift in internet user behaviour will mean that online display advertising should be firmly on the agenda for 2010. The internet is no longer just a means of finding information, it’s a core source of entertainment and communication and is a key channel for brands to reach and engage with their consumers.

2009 has seen a shift in popularity of content driven websites versus transactional sites with the former now receiving 73% more traffic than the latter. Growth in terms of ‘share of visits’ is prevalent across a number of sectors: Entertainment sites (e.g. YouTube, iPlayer), Social Networks and Forums (e.g. Facebook, Twitter), and News and Media (e.g. broadcast news sites, BBC, ITV and Sky as well as newspaper and web-only news content) have all seen an increase in share of visits and therefore share of time spent online.

According to ABCe statistics for the first half of 2009, the Mail Online was the most popular national newspaper website for two consecutive months (June and July) this year. In July alone, the unique users grew by half a million, which followed its staggering 5 million unique user growth in June. The Guardian remained second from the top in July despite having lost close to 2 million users. Telegraph.co.uk remained in third slot, but lost over half a million unique users in the time period. (Source: MediaTel/ABCe July 2009). Reaching such high volumes of unique users and a large percentage of the internet population, it’ll be interesting to see how 2010 usage pans out if the much publicised charging structure for online newspaper content goes ahead. With less than a third of users stating that they’d be willing to pay for online content we could be seeing a very different picture next year.

At the end of July, Microsoft and Yahoo! confirmed a 10 year global search advertising deal. The deal is forecast to generate ad income of £305m per year. Google still dominates the search market and is likely to do so for the foreseeable future but this venture will prove to be real competition for the search giant and it’s good news for the industry that there’s a serious platform out there to rival Google.

Finally, it would be impossible to do a round up of 2009 without mentioning social media. Competition in the social media space hotted up over the summer with Myspace purchasing ilike and Facebook purchasing social media start-up, Friendfeed. Facebook’s acquisition will improve its real time capabilities, bringing it closer to rival Twitter. While Myspace’s acquisition of social music recommendation service iLike, substantiates its position as an entertainment portal. Facebook is now making a profit for the first time in its 6 year history. It has 9m unique users visiting the site per day in the UK.

Twitter increased its worldwide traffic to 44.5 million unique users in June, up 19% month on month, according to comScore. Unique users increased by 1,460% from June 2008, when its worldwide audience was 2.9m. It still has a long way to go before it surpasses Facebook, however, which is  the world's largest social networking site with over 307m users, and MySpace, which has around 125m global users, according to comScore's April figures. 

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