LONDON (Dow Jones)--Internet advertising sales overtook television advertising sales for the first time in the first half of this year to become the U.K.'s biggest advertising medium, according to new research by the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers.
The new research will make grim reading for commercial television stations which have already lost a portion of their advertising dollars to the Internet at a time when the recession has shrunk the entire pool.
Internet advertising sales rose 4.6% on the year in the first half to GBP1.75 billion, giving it a market share of 23.5%. Television advertising fell 16.1% to GBP1.64 billion, dropping into second place with a 21.9% market share, the research showed.
The entire U.K. advertising sector contracted 16.6% on the year to GBP7.47 billion, according to figures by the World Advertising Research Council.
The U.K. has led the charge for growing Internet market share across the world for several years, according to figures from media company Group M. Spokesman Adam Smith said this correlates closely to the level of Internet penetration. He points to Denmark, which also has high Internet penetration, and trails only slightly behind the U.K. in its online advertising market share figures, as a case in point.
According to Group M figures, which unlike the IAB don't include direct marketing, online advertising accounted for just 13.9% of U.S. advertising sales in 2008. TV had a 43.4% market share.
Enders Analysis analyst Ian Maude attributes this marked difference in advertising trends across the Atlantic to several factors, not least that U.K. TV advertising is affected by the BBC, which is advertising free. But he also points to the U.K. consumer's penchant for shopping and the growth of e-commerce, or online shopping, which drives search advertising online.
"TV maintains its role as the big daddy of display advertising, but the main driver of Internet advertising in the U.K. has been search and particularly Google Inc. (GOOG)," he said.
And the future for Internet advertising in the U.K. is rosy, with Enders estimating an annual market share gain of 3% both this year and next, which is partly because all other advertising mediums are contracting, "but it's still phenomenal growth" in the current climate, Maude said.
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