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Internet advertising spends in the UK rose over £2mn in 2006 - representing an increase of 41.2 per cent as brands move their marketing budgets online.

Internet advertising spends in the UK rose over £2mn in 2006 - representing an increase of 41.2 per cent as brands move their marketing budgets online.

Advertisers spent £2.016bn on online advertising over the course of the year, targeting the 31mn Britons who use the Internet, according to figures released by the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) last week. This increase means that the Internet's share of all advertising revenues has increased from 7.8 per cent in 2005 to 11.4 per cent in 2006. The UK's share of spend on internet advertising is nearly double the global average, which is 5.8 per cent.

Such growth was not at all representative of the advertising industry as a whole, which grew by just 1.1 per cent over the year - with almost all traditional spending on traditional media losing revenues. If the Internet were excluded from the figures, then advertising revenues as a whole would have dropped by £466.1mn or 2.9 per cent. Guy Phillipson, CEO of the IAB commented: "2006 was a tough 12 months for the advertising market as a whole, but once again the internet bucked the trend, recording a 41% increase in ad revenues."

The Internet has now overtaken national newspapers in terms of revenue and represents a spend just over half of that devoted to television, which dropped 4.7 per cent over the period to £3.9bn. Paul Pilkington of PwC commented:"The incredible growth of online has beaten all the industry predictions. The internet has now overtaken National Press as marketers have followed their audiences online and enjoyed measurable returns on their investment."

When it comes to formats, all kinds of internet advertising showed strong growth. Revenues from display adverts - such as banners and skyscrapers - rose 35 per cent, a figure boosted by the increased use of 'rich' media formats such as video. However, paid search listings and classified advertising rose more quickly, growing to 52 per cent to £1.2bn and 45 per cent to £379mn respectively.