We reported last week on an Internet Advertising Bureau showing UK online ad spend grew 41 percent in the first half of 2007, making up 15 percent of total national ad spend. Now an article from ClickZ, citing lower proportions from the US market, asks whether this implies Britain has the potential to outstrip the America for those online ad dollars – or pounds, as the case may be.
The argument in favor of this: In the US, online ad growth for the first half of 2007 was only 26.4 percent, accounting for 13 percent of total advertising spend. And the respective rates of momentum give another clue to the state of each market – the UK is seeing the same pace of growth this year as it did last year, while the US growth rate was down from 37 percent in 2006.
And for the defense: The main one is that US market is more mature, as pointed out by Alex Marks, who heads up marketing for Microsoft (NSDQ: MSFT) Digital Advertising Solutions in the UK. And taking real numbers, online ad revenues in the US are still significantly higher than in Britain — almost $10 billion during the first half of 2007 versus £1.3 billion ($2.7 billion) in the UK. So, even with the very high value of the pound against the dollar right now, it is unlikely UK revenues will approach that of the US any time soon.
Other points worth noting: : In the US, online classifieds have dropped from 20 percent to 17 percent of overall revenue; in the UK, they’ve gone up by three percent to account for 21 percent of all revenues. In the US, search and display ads have increased one percent each, and now account respectively for 41 percent and 32 percent, while these areas have seen drops in the UK market. Nicki Lynas, manager of entertainment and media practice at PwC, believes the European market as a whole will rival that of the US in three to four years.
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