Growth in online advertising expenditure in the UK is outstripping that of the US and many other nations, and is predicted to account for over half of total advertising spending in Western Europe by 2010, with a 52.6% share.
Factors behind the growth include a strong economy, increased broadband penetration, mobile internet access and advances in ad technology.
The current rate of growth in ad spend will slow down over the next few years, according to eMarketer. The UK experienced 46.8% year on year growth last year, with total online ad spend reaching £2bn, exceeding newspaper ad spend for the very first time.
Growth of 31% is predicted for 2007, with ad spend expected to reach £2.6bn, eventually reaching £4.45bn by 2011.
In addition, online advertising is expected to account for 18% of total UK ad expenditure this year, a far greater percentage than in the US and other European countries. Last year, online accounted for 11.4% of ad spend, compared with 7.5% in the US, and the global average of 5.8%.
A recent report from the Internet Advertising Bureau (IAB) backs up these predictions. The UK accounted for 39% of the £5.4bn spent on online advertising in the 13 EU countries last year. Next was Germany on 22% and France on 15%.
Advertisers spent an average of £56 for every UK web user in 2006, more than twice the EU average of £26 per user. For comparison, the average ad spend per US internet user is £40.
Of the total £5.4bn EU online ad spend. 45% went on search engine marketing, 31% on display ads, 22% on classifieds and directories, and 1.6% on email marketing.
Online ad expenditure exceeded 10% in just three countries; the UK, Netherlands and Denmark.