Spend on online advertising has surpassed that of television expenditure in Britain for the first time ever.
A study by PricewaterhouseCoopers and the Internet Advertising Bureau found that while spending on TV advertising fell 16.1 per cent to 1.639 pounds billion in the first half of 2009, online advertising spend soared 4.6 per cent to 1.752 pounds billion.
Online Advertising
This is a huge milestone. Online advertising has been regarded by many, for a number of reasons, as the poor relation of TV advertising, and this overtaking has come earlier than many expected.
The main driver for this shift has been the recession, for two reasons. The first is obvious: budget cuts have been made and companies are seeing greater benefits in online advertising compared with television. The second is companies are reacting to the massive shift in consumer behaviour.
Savvy consumers are now looking online for the best deals in these penny-pinching times, and this has created an e-commerce boom. While this has resulted in many high street casualties, companies now have to put much more into their online presences.
Search Is Booming
This is great news for the search industry. This sector has secured the lion’s share of the spending, with 59.8 per cent, or 1.04 pounds billion being spent here.
Search is booming. On a global scale, the industry is quickly growing from a $12 billion industry in 2007, to a predicted $25 billion sector, according to SEMPO, the Search Engine Marketing Professional Organization. This is a massive 100 per cent increase over the period of four years.
These figures do, of course, include both pay-per-click campaigns, as well as search engine optimisation marketing. Search is booming, but paid search marketing isn’t what it once was, and many companies are realising the true benefits of natural search engine marketing.
Cost per click is on the rise due to more and more companies venturing into the online marketplace. Google’s CPC rose by 15 per cent in 2008, and so paid search is eating a larger chunk of online marketing budgets. Market research company comScore reports that companies spend an average of 85 per cent of their search budgets on paid search. Couple with this the research conducted by technology and market research company Forrester, which found that consumers click on natural search engine listings 85 per cent of the time, and you will understand that a shift is likely to take place.
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