Internet gets closer to UK ad market dominance

Ofcom’s annual report into the UK communications market suggests the internet will become the UK’s biggest advertising channel “in the next few years”.

The bumper report by the communications regulator looks at the UK’s £52-billion TV, radio, broadband, telecoms and mobile industries. It runs to 365 pages and contains over 350 tables and charts.

The section on advertising spend reports that between 2003 and 2008 the internet’s share of total advertising expenditure rose from 3% to 20%. “It is now the third most popular advertising medium after newspapers (25%) and television (23%),” the study says, “and on current trends looks set to rise to first position in the next few years.”

Paid-for search accounted for the majority of online advertising revenue (60.6%) in 2008, and grew by 23%, faster than both display (5%) and other sources of classified advertising (21%). In cash terms, £2 billion was spent on paid search during 2008.

Google’s dominance of the UK search market is confirmed by the report. However, the overall search market is also growing – the study refers to figures sugegsting that 91% of people who used the internet in May 2009 visited a search site, 3% more than in May 2008.

The press picked up on the headline finding that UK consumers would sooner cut back on holiday spending, DIY or eating out than consider spend less on broadband, mobile phones or TV.

However, there is little mention of travel in the report. Travel videos on YouTube are watched regularly by only 11% of visitors to the Google-owned site. More than two-thirds of UK visits to YouTube are to watch comedy videos.

The amount of time spent online by the average Brit comes in at 25 minutes a day. When Ofcom began issuing reports in 2004, the average was nine minutes.

One chart looks at which medium or activity would be most missed by the UK public. For 25-34 year olds there has been a big shift since 2007. This year, 19% of this age group would miss the internet the most, compared with 14% in 2007. TV, on the other hand, would be missed most by 40% compared with 47% last time.

For 16-24 year olds, there has been a shift back towards TV dependence. Almost two in five would miss the TV most, compared with 28% last time.