New UK internet ad figures show display and classified are gaining on search

It’s a moot point whether or not internet search should be counted as advertising, surely it’s direct marketing?

However its phenomenal growth in the UK is slowing down, at least in relation to online display and classified.

Search’s share of the total UK online ad market in the first six months of 2010 slipped back from 61.7 per cent to 59.5 per cent at £1.18bn (mostly Google’s of course) while online display grew by 6.4 per cent to hit £381m and online classified, to the great relief of business to business publishers among others, came back a surprising 11.4 per cent to £379m according to figures from the Internet Advertising Bureau.

Display has always struggled online as advertisers and agencies have tried and often failed to find a way to engage a notoriously fickle audience, just a click away from another site.

But the growth in online video ads has played a part in attracting more advertisers to the medium and good old social media is also playing its part.

The IAB, which has only just begun including social media ads in its numbers, says that advertising on social network sites is only just beginning to hits its stride, accounting for about £50m of the display market.

But big advertisers like Unilever and Vodafone are starting to commit budgets to it and the market is now taking off. Facebook alone is expected to generate £85m in UK ad revenues over the next couple of years and newcomer Twitter, in terms of advertising anyway, hasn’t begun to register yet.

It will though. Twitter announced yesterday that COO Dick Costolo, the man behind the introduction of ‘sponsored Tweets’ is replacing one of the company’s founders Evan Williams as CEO (Williams is staying).

Costolo’s job is to try to match Facebook in the social media ad stakes.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.