WPP is projecting the UK ad industry will spend more online than on TV by 2009. WPP’s Group M has forecast that by the end of this year 24.8% of the market will be on the internet compared to 26% in television. Online will then take the lead, with UK advertising expected to grow over 30% to 3.4 billion pounds/6.72 billion dollars in 2008. Television advertising is only anticipated to grow by less than 1% this year. By 2009, the UK will likely be the first major economy after Sweden to see online ad spend surpass TV advertising, the report claims. Radio advertising is expected to grow by 2%, due to its high compatibility with internet advertising.
Said Adam Smith, futures director of Group M: “The UK is a special case. Its TV share is depressed by the BBC and there is still a large and healthy print sector and Britons are among the world’s heaviest internet users…The internet is not one medium, its growth rate is a blend of three distinct businesses growing at different speeds: search, display and classified. Most of the growth is coming from search advertising and that is being fuelled by either new money or from the direct marketing sector, not so much from TV ad budgets." When we talk about internet advertising, we are talking about a mix which includes search, display and classified advertising. Out of that, search accounts for around 60%, and that money is not coming from TV ad budgets. The internet will sit beside TV as an increasingly important avenue for advertisers.”
Smith also said online video would see rapid growth: “FMCG [fast-moving consumer goods] is a small minority of online display investment. This is, however, set for rapid growth. Faster, cheaper memory makes the production, distribution and storage of video easier. Video is the mother tongue of FMCG marketing. It is also 30% of all web traffic already. Advertisers are aware of the need to find the under-35s TV is giving up, and that a website alone may not be enough to attract them.”