Digital advertising defies downturn in Britain

Advertising spending on the internet jumped 12.5 per cent in Britain last year, defying a flagging economy as companies battled to reach consumers spending more time on smartphones and tablet computers.

The Internet Advertising Bureau (IAB) said on Wednesday a study conducted by PwC showed spending on online advertising reached 5.42 billion pounds in 2012.

The study, which used data from companies that had provided information the previous year, said internet ad spending rose 607 million pounds on 2011, with some 323 million pounds due to an increase in mobile advertising.

Britain has led the way in moving advertising from traditional areas like newspapers and radio to the internet. A high take up of broadband and the rise of smartphones and tablet computers which allow users to access the internet on the go have helped the shift.

"Advertisers are increasingly buying integrated campaigns across online and mobile rather than regarding mobile as an afterthought," said Tim Elkington, Director of Research & Strategy at the Internet Advertising Bureau.

With around two-thirds of Britons owning a smartphone as of December 2012, mobile advertising now accounts for almost 10 per cent of all digital ad spending, compared with about 1 per cent in 2009.

Video advertising grew 46 per cent to 160 million pounds, accounting for 12 per cent of online and mobile display in 2012.

Demand for mobile ads is likely to increase after auctions for next-generation 4G airwaves earlier this year, which are set to deliver speeds more than five times faster than 3G services.

These services will make downloading high-resolution video easier and enable better multi-tasking on the latest smartphones and tablets. EE, Britain's biggest mobile operator, said on Tuesday it was on track to sign up 1 million customers for its 4G service by the end of the year.

The consumer goods sector overtook the finance sector as the biggest spender on digital display advertising - accounting for almost 16 per cent of display ad spend in 2012.