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Online advertising growth exceeds expectations

Posted 19th April 2010.

The growth in online advertising in 2009 has exceeded many analyst’s expectations.

Last year the digital marketing industry – which includes search engine optimisation and pay per click expenditure – grew by 4.2 per cent.

The total amount of cash spent by British companies on digital marketing climbed from £3.35 billion in 2008 to £3.54 billion in 2009.

Bi-annual figures compiled by the Internet Advertising Bureau and PricewaterhouseCoopers show that despite the devastating impact the recession has had on the wider advertising industry, online marketing has weathered the storm particularly well.

Since 2001, when the dot com bubble burst, internet advertising expenditure has registered growth every year – climbing by a massive 2,200 per cent over the past decade from £153 million in 2000 to £3.5 billion at the end of 2009.

Guy Phillipson, chief executive officer of the IAB, said: "In 2009 the advertising industry was hit hard but online has proved itself a winning medium, capturing a greater share of marketing budgets.

"In the past year, we’ve seen some real success stories as search passed the £2 billion mark, and online video advertising experienced spectacular growth. And with sectors such as retail and consumer goods increasing their spending on the internet we can look forward to a healthier 2010."

Meanwhile, Eva Berg-Winters of PricewaterhouseCoopers said: "Ten years ago online was a new medium with high expectations, but backed by little commercial reality. Since then it has matured to become an integral part of our lives, which marketers have learned to trust."

She added that the digital marketing sector’s success could be pinned on the fact that online advertising and pay per click advertising offer measurable benefits to industry professionals, which have ensured continued investment despite the ongoing global economic downturn.

The search engine optimisation and pay per click advertising sector have also been buoyed by a simple growth in the number of internet users.

Recent data from the UK Online Measurement Company and Nielsen showed that the UK’s active online user base grew from 35.5 million in February 2009 to 39.7 million in February 2010.

And in the final quarter of 2009, digital marketing professionals had a relatively positive outlook when compared to professionals from other industry sectors.