News Article - Online Ad Spending in the UK

When you look at online advertising statistics, two questions immediately spring to mind:

1) Why does the internet command a much bigger share of ad expenditure in the UK than anywhere else in the world?
2) Is the UK likely to stay way ahead of the market or will the rest of the world inexorably catch-up?

So here are six views that may go some way to answering those points:

1) The UK has an unusually well developed digital technology base: broadband penetration is higher than many other markets, but also digital applications on mobile phones, TV, radio and so forth, are often at the leading edge. For example, we are one of the first nations to switch exclusively to digital TV and are world-leaders in DAB radio. This means that the UK marketer, the UK advertiser and the UK consumers are more switched on than most other markets.

2) The UK is small geographically. This means the online retail/home delivery market is logistically much better developed here than in many other markets. This has accelerated the relevance and attractions of internet ad expenditure ahead of other markets.

3) The UK is an English-speaking territory (obvious statement I know), but in practice the software leadership, creative industry, and advertising experimentation is English-language led. Most global corporations have English as the company language. The world’s great digital corporations such as Google, Microsoft and AOL all operate in English. So that puts the US and UK at a huge competitive advantage. Then, you quickly realise, the UK is a much smaller market to test any risk than the US so it becomes logical that it will take a disproportionate share of spend as a lead market for the rest of the world.

4) London is, and always has been, a unique creative hot-house. There is an extraordinary concentration of digital agencies, ad agencies, media agencies and creative talent within two or three square miles in central London. Leading global advertising groups, like WPP, sit within a five-minute walk of the world’s leading digital talent. Combine this with the location of regional or global HQs for many advertisers and you get a massive cross-over. In this respect, London drives confidence and experimentation in online advertising that is impossible for others to replicate.

5) The UK, uniquely, is home to the BBC. This has many layers of significance. First, it gives us a well-funded market leading digital media player (i-player) whereas leading media players in traditional media are US or Far East based. Second, because the BBC dominates UK broadcasting, the percentage of ad revenues in UK shared between TV and Radio is much lower than elsewhere.

6) Finally, the UK has a traditionally well-established classified ad tradition, especially in sectors such as property ownership. We have a long history of press readership at both a national and a local level and such classified ads transfer online particularly well, so it is more readily, and more quickly, accepted as a recognised advertising medium.

These are theories of course, but well founded I believe. I think it’s clear that in the UK we have something that lenDs itself well to online spending. Because of this, it is fair to say that the UK will set the pace for the world for a fair while yet, but that we will continue to be the exception rather than the norm.