The UK online ad market grew 17.1 per cent year-on-year in 2008, to reach £3.35 billion, despite total ad spend dropping 3.5 per cent to £17.5bn.
Internet ads account for 19.2 per cent of all ad expenditure, according to the figures released by the IAB, PriceWaterhouseCoopers and the World Advertising Research Centre.
Despite the cost of digital display falling by more than a third over the past year due to an influx of cheap inventory from publishers and social networking sites, the medium grew 7.7 per cent to £637.4m, accounting for 19 per cent of online spending in 2008.
However, some of the UK's biggest advertisers are still allocating only a fraction of their marketing budgets to digital. According to Nielsen, the UK's third biggest internet spender the COI, cut its digital budget 18.3 per cent to £7.1m in 2008, accounting for just 3.9 per cent of its media budget.
FMCG companies Procter & Gamble and Unilever both allocated just 1.1 per cent of their advertising budgets to digital. Barclays Bank slashed its online spend by 60 per cent last year, reflecting trends reported by the IAB showing the finance sector accounted for just 7.6 per cent of all online ad spend.
Paid-for search now accounts for 59.3 per cent of online ad spend, after growing 22.7 per cent to £1.98bn. Despite current economic circumstances resulting in the losses of thousands of jobs across the country, recruitment was the biggest spending sector, accounting for 23.8 per cent of online ad spend.
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