The seemingly unstoppable rise of Facebook fuelled year-on-year growth of more than a quarter in the UK online display advertising market to almost £1bn last year, as the total internet ad market cracked £4bn for the first time.
The Internet Advertising Bureau’s annual report, compiled with PricewaterhouseCoopers and published today, attributed a 27.5% year-on-year surge in online display advertising to £945m to the Facebook effect as advertisers clambered on board the social media bandwagon.
In total the UK ad market grew by 12.8% year-on-year in 2010 to pass the £4bn mark, with £1 in every £4 spent on marketing and advertising by British companies now spent online.
According to industry sources, Facebook UK made about £100m in ad revenue last year. The IAB said that the spend on social media accounted for 14%, or £132m, of the online display advertising market – a 200% rise year-on-year.
In 2009 the online display advertising market was worth £709m, meaning growth last year of £236m or 33%, however the IAB has stripped out “new media entrants” in the online display sector to give a like-for-like growth figure of 27.5%.
The online display market also benefited from the rise of video advertising, which almost doubled in size to £54m. Online display now accounts for 23% of all internet advertising.
Advertisers’ appetite to tap into the Facebook generation reduced the skew of the proportion of the total £4bn spent on internet advertising attributable to paid-for search – effectively money spent on Google (NSDQ: GOOG) – down from 61% to 57%. The paid-for search market grew by 8% year-on-year to £2.35bn.
To put this in perspective the total UK TV ad market was worth about £3.5bn last year.
However, TV advertising bounced back strongly from the 2009 recession, with 15% year-on-year growth in 2010, outstripping the growth rate for internet advertising for the first time since it has been measured as a substantial media more than a decade ago.
Bucking the trend seen in print advertising, the online classified market grew 9.7% year-on-year in 2010 to £751m. Mobile advertising grew 116% to £83m.
This article originally appeared in MediaGuardian.