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UK online display advertising surpasses £1bn

UK online display advertising surpassed £1bn for the first time last year, driven by the increase in brands using bigger and more expensive rich media ad formats.

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Display accounted for 24% of all online ad spend in 2011, up from 23% in 2010 to £1.13bn, according to the latest Internet Advertising Bureau advertising expenditure report, conducted by PwC.

Social media display ads were one of the biggest drivers of the increase in display spend, with that category up circa 75% year-on-year to £240m.

Twitter introduced ads in the UK for the first time in 2011, while sites such as Facebook and YouTube rolled out a range of new ad formats.

Video advertising doubled year-on-year to £109m and now accounts for more than 10% of all display advertising.

Brands and portals such as Yahoo! championed video formats last year, as consumers shift from becoming “internet users to internet viewers”.

Display growth was also driven by bigger ads, such as the billboard display format. The IAB claims that billboards offer nine times better ad awareness levels than traditional formats and wallpapers provide seven times the level of message association.

The entire UK online advertising market grew 14.4% to £4.48bn, its biggest year on year increase in more than five years.

The retail category was the biggest growth segment in 2011. It became the third biggest display advertiser in the period, with 12% share of the total spend.

FMCG brands were second-biggest spenders on display ads, just 0.2% behind finance brands’ 15% share of display spend.

Paid-for search advertising remained the biggest channel for digital advertising, accounting for 58% of total spend, up 17.5% year-on-year.

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