Page last updated at 23:34 GMT, Monday, 7 April 2008 00:34 UK

Online ads 'to beat TV' by 2009

A pensioner uses her laptop at her London home
More people are going online thanks to cheaper laptops and broadband

The value of internet advertising in the UK will overtake that of TV adverts by 2009, a report suggests.

The Internet Advertising Bureau (IAB) said faster broadband speeds and greater ownership of laptops were helping the growth of web adverts.

Online advertising grew 38% in 2007 to be worth 2.8bn ($5.5bn), taking its market share to 15.3%, up from 11.4% in 2006, the report showed.

It is now the biggest medium behind TV and press display adverts, it said.

"To grow 38% from 2bn to 2.8bn is a very powerful performance," said Guy Phillipson, chief executive of the IAB.

"It's clear marketing directors now recognise the value of online to drive their business and more and more are using rich media and video to build their brands, just as they do on TV," he added.

The growing influence of social networking websites, the introduction of cheap laptops and catch-up TV, like that offered by the BBC iPlayer, were also key drivers of the internet advertising boom in Britain, the report suggested.

It said the nation had the most developed market in the world.

Growing formats

The report, compiled in partnership with accountancy firm PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC), showed the internet was the biggest driver of overall advertising growth in 2007.

A screen grab of the BBC iPlayer website
The BBC iPlayer is attracting more people online, the report says

The value of all online formats grew, with display adverts, including banners and video, growing 31% last year.

Embedded formats now make up almost 80% of total display advertising after growth in the sector doubled within two years.

Meanwhile, the market for paid-for search adverts is "not slowing but maturing" as marketers become more sophisticated in the way they use the medium.

"Brands are now using search more intelligently, getting a greater return on investment through 'key phrases' and more accurate targeting that reflects consumer behaviour," the report said.

Classified advertising online saw a 54% year-jump in growth and was worth 585.3m in 2007 as recruitment firms remained the biggest users of online ads, with 25.7% market share.

The automative sector followed with 11.9%, while technology overtook finance for the first time to take third place.

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