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The Booming UK Online Advertising Market

Internet advertising has again buoyed the UK advertising industry with above-expectation 41.3 percent year on year growth in the first half of 2007.

This takes the sector to a half-year high of 1.3 billion pounds -- compared to 917.2 million pounds just a year ago -- lifting online advertising's market share significantly, to 14.7 percent.

The results of the biannual internet advertising spend study commissioned by the Internet Advertising Bureau (IAB), the UK online advertising trade body, in association with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC), point to online advertising expenditure reaching a potential new high of 2.75 billion pounds by the end of 2007.

The total UK advertising market grew by 3.1 percent during the first half of the year to 9.1 billion pounds. However without the online contribution, UK media expenditure would have fallen by 1.9 percent (or 147 million pounds).

Once again the internet has propped up the UK advertising economy and remains the fastest-growing advertising medium. The new results see online overtake the size of the direct mail sector, which has a market share of 11.8 percent.

Classified advertising is the latest online success story, growing revenue by 72 percent year on year, with a share of 20.8 percent of all internet advertising spend. Online classifieds in the recruitment, automotive and property sectors are shaking-up the print industry, with marketing budgets switching at a steady rate in response to the demands of the internet user.

Internet display advertising (including banners, skyscrapers and rich media formats) revenue climbed 33 percent, with a share of 21.5 percent. Nine out of ten online households in the UK are now on broadband, and marketers in all sectors are targeting consumers with increasingly creative rich media and video advertisements.

Paid-for search (search engine listings that advertisers pay for when a consumer clicks through to their site) revenue increase 44 percent, with a share of 57.1 percent of the online total.

Growth is attributed to at least half of all eCommerce transactions starting with a search. In July 2007 internet users carried out 1.4 billion search queries and over 80 percent of these resulted in a click through to a website.

UK advertisers recognise that search plays a valuable role in building brands, selling products and creating a competitive advantage online.

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