UK loves online advertising

Mixed news today on the marketing side for the online travel sector, following the release of estimates as to the amount of online advertising that has so far been spent in the UK this year.

The good stuff: in the first six months of 2006 online almost £1 billion was spent online, according to an Internet Advertising Bureau/PricewaterhouseCoopers/World Advertising Research Center report.

It doesn’t even take a city analyst to work out that all going well the internet should reach around £2 billion in media spend by the end of the year – a massive leap from the £1.4 billion in 2005.

So where is this extra money coming from? Well, the wobbly national press sector is expected to be overtaken by the end of year after bringing in just £76 million more than online in the first six months of 2006 - so some is undoubtedly coming from there.

TV’s share of the market - with ITV a noticeable giant of the industry facing problems - has slipped by 1.3% in H1 2006, although it still commands a 22% share and almost £2 billion in ad revenues.

Elsewhere, the outdoor market – billboards, posters, public transport – is now half the size of online, which has a 10.5% share of the market, while consumer magazines slumber at 4.6% and radio at 3.4%.

So, good news that the online sector is awash with extra revenues, boosted primarily by financial services and recruitment, but helped by all sectors.

Where it gets a little tricky for travel is when you look behind the figures. Almost 60% - around £530 million – is made of pay-per-click advertising, with a huge proportion going into the coffers of Google.

For the travel companies desperate to reach the eyeballs of consumers it could mean number of things: they may have to pay more for popular keywords; or, if they want to get smarter with their pay-per-click campaigns, search engine marketing will become even more complicated, and therefore perhaps more expensive.

However, an increase in the share of the overall advertising market reflects the popularity of the web and its gradual shift to perhaps becoming the primary media channel.

And that is ultimately good news for online travel companies…

Kevin May, editor, Travolution