Spending on online ads tops £1bn following smartphones boom

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ONLINE display advertising passed the £1 billion mark for the first time last year, according to new figures.

Despite the difficult economic backdrop, brands in Britain spent almost £5 million advertising online, with video ads and marketing on social media platforms contributing to the biggest increase in five years.

The study from the Internet Advertising Bureau (IAB), conducted by PwC, said advertising on the internet increased by 14.4 per cent to £4.8bn in 2011.

Britain has led the way in terms of moving advertising money from traditional areas of spending, such as newspapers and radio, to the internet due to the high level of internet access and the proliferation of smartphones, which allow users to access the internet on the go.

The IAB said 39.7 million people were on average accessing the internet each month in Britain, while 27 per cent of all the time spent online was spent on social networks.

Among the fastest areas of online growth, spending on online video ads doubled in the year to £109m and has now grown eightfold since 2008. Spending on social media platforms, such as Facebook, YouTube and LinkedIn, was up 75 per cent to £240m.

Spending on mobile devices, which is included in online spend, was up 157 per cent to £203m, due to the increasing number of people who own smartphones.

“Online and mobile advertising have experienced staggering growth since this study began in 1997,” said Tim Elkington, director of research and strategy at the IAB.

“The 2011 results are full of breakthroughs for digital; with online display passing the £1 bn barrier for the first time, proving that advertisers increasingly recognise the central role that online plays in their marketing campaigns,” Mr Elkington added.

Of the different sectors, finance brands were the biggest advertisers in display advertising, ahead of consumer goods and retail.