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Online is advertising success story for 2009

Chris Andrews

Targeted approach could drive growth in mobile ads

The Interactive Advertising Bureau and PricewaterhouseCoopers have published their figures on internet advertising spends for the first half of 2009 in both the US and UK markets. One would understandably expect there to be some pretty gloomy numbers here, but the picture isn’t all that bad.

Let’s take the US, where internet advertising revenues for the first half of the year stood at $10.9bn. Yes, this was a 5.3% decline from the same period in 2008, but putting this in perspective, the second quarter saw total newspaper advertising down 29%, according to the Newspaper Association of America. A mere five per cent decrease would be party time in news circles.

According to the IAB and PwC’s figures, search, as well as display-related advertising, has continued to represent the largest percentages of overall interactive advertising spend, with search revenues in the region of $5.1bn in the first half of the year. This was actually a slight increase from last year. Display-related, including display ads, rich media, and sponsorships, totalled nearly $3.8bn, which was down 1.1%; again, in the grand scheme of things, not bad.

Digital video, as well, appears to be the way forward, experiencing growth of 38% compared to the first half of last year.

“While the overall advertising market has continued to be impacted by current economic conditions, marketers are allocating more of their dollars to digital media for its accountability and because consumers are spending more of their leisure time online,” said David Silverman, PwC Assurance partner.

Meanwhile in the UK, internet advertising actually grew by 4.6% to £1.7bn in the first half, compared to the entire UK advertising sector contracting by 16.6%. This means that the internet has now overtaken television advertising to become the UK’s single biggest advertising medium.

“Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions. Online display has performed notably well against its peers in TV, print and radio despite more than £1.5 billion being wiped off the advertising industry,” said Guy Phillipson, chief executive of the IAB.

Now if we look at some other figures produced by Gartner earlier this year, worldwide mobile phone sales totalled 286.1 million units in the second quarter of 2009, which was a 6.1% decrease from the same period in 2008. However, smartphone sales surpassed 40 million units, which was a 27% increase on last year, representing the fastest growing segment of the mobile device market; and this is set to continue apace.

It’s pretty easy then to put two and two together. Internet advertising is the only winner, or almost winner, this year, and smartphones capable of accessing the internet are the fastest growing segment of mobile devices. This means increased access to existing web advertising, as well as definite possibilities for specifically targeting advertising at high end mobile phone users.

This hasn’t been lost on Google, always ahead of the curve when it comes to mining the net for advertising gold. They have just launched a new feature for AdSense mobile publishers that enables large text and image ads on their sites, specifically aimed at high-end smartphones. And a logical extension to this would be an increase in mobile video ads.

Already, according to IAB, online video advertising spend for pre/mid/post-roll has grown in the UK to almost £11.4 million for the first half of 2009, or close to 200% growth in 12 months. So will the growth in high end smartphone take-up result in real attention being given to mobile video ads? It seems a distinct possibility. It may be worth noting that a report published last year by MobiTV, the mobile television provider, found that mobile video ads generated more than fou // // SCRIPT // ]]>

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