Online advertising in the UK now accounts for 25% of the total market valuing it at just over £4 billion for the first time, with display advertising on social networking sites being the single fastest growing category.
According to a bi-annual report published by the Internet Advertising Bureau UK and management consultancy PricewaterhouseCoopers, while the overall industry grew at a rate of 7.2% during 2010 to hit £16.6 billion, the online space saw revenues increase by 12.8% on a like-for-like basis or 15% in year-on-year terms.
The biggest gain was in the area of display advertising on social media sites, however, which surged almost 200% on a like-for-like basis. The other key growth driver was video ad sales, which jumped 91% in year-on-year terms.
The total display advertising sector, meanwhile, grew by 27.5% on a like-for like basis to £945.1 million, representing 23% of total online spend, up from 20% in 2009.
But the value of the mobile advertising market also rose exponentially, leaping 116% to £83 million, up from 32% in 2009. The entertainment and media sectors led the charge, but interest among financial services, telecoms and consumer goods firms also increased.
Guy Phillipson, IAB UK’s chief executive, said that 77 of the 100 brands surveyed had restored their advertising budgets in 2010 and online was a big winner as a result.
"The power of online to build brands is clearly reflected in the spectacular growth of display thanks to the popularity of social media and video formats. And with mobile advertising finally coming of age, marketers are enjoying an incredible array of digital opportunities," he added.