UK Online Ad Spend So Very, Very Close to Surpassing TV

Last Updated Aug 21, 2008 8:17 PM EDT

uk-online-spend-emarketer.gifA new report from eMarketer looks at the numbers for the numbers from Ofcom, the country's authority on telecommunications, and finds that while online ad spend has rocketed an average of 70.2% in each of the past five years, to nearly £2.8 billion, or $5.6 billion last year, it still has just a bit more to go before it surpasses ad spend on television.
This is because, while Ofcom shows that the top TV channels in Britain, ITV1, Channel 4, S4C and Five, drew in £2.4 billion or $4.8 billion, these channels are all over-the-air broadcasters, and fail to take in the significant ad spend spent on digital channels in the UK. From the eMarketer report:
"Though this milestone is imminent, it is difficult to believe that it has already occurred," said Karin von Abrams, senior analyst at eMarketer. "No other source claims to have confirmed this event--and in fact the Ofcom statements do not really say it either."
Ms. von Abrams noted that the four TV channels mentioned by Ofcom are terrestrial, "free-to-air" channels, not digital, and that they did not account for all TV ad spending in the UK. Digital-only channels accounted for almost one-third of TV ad spending, and the proportion is rising.
I've written about online ad spend surpassing TV in the UK before. It's become something of a lodestar for the online advertising community, showing the ever-rising potential for interactive advertisers to become the new big players in the advertising market. It should be noted that due to the differences in the UK and US television market, it will likely be a few more years before the same thing happens in the US.
Still, US companies involved in interactive advertising have reasons to be optimistic. ClickZ put out an article today, citing a ContextNext report, showing that investment in companies involved in online advertising, if declining a smidge overall, is actually drawing larger amounts of money in individual investments. This is despite the doldrums the economy is currently finding itself in. From the ClickZ article:
ContentNext estimates the overall investment in online ad companies during the period -- including the investments where money wasn't revealed -- totaled more than $2.1 billion with the average investment coming in at about $14 million.

In a quarter-to-quarter comparison, ContentNext says that, while the number of investments in online advertising companies declined slightly, the money involved increased by about $100 million, going from $300 million during Q2 of 2007 to $400 million during Q2 of 2008.