by Adrian Pennington
October 15, 2009

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Against the backdrop of a disastrous year for the UK economy where 16.6% or £1.5bn in media spend was wiped off the board in the first half alone, the share of online ad spend continues to shine.

Indeed online has now overtaken TV in overall spend in the UK, the first major economy where that has happened.

During his keynote speech at Streaming Media Europe, Guy Phillipson, the CEO for the country’s advertising standards body the Internet Advertising Bureau (IAB) presented a scenario in which online video was growing in stark contrast to traditional media.

“This year for the first time in any mature market online ad spend topped that of TV by taking a 23.5% share,” he stated. That represents £1.75bn in advertising spend online for the first half of year against an overall media budget of £4.5bn.

“95% of all that online spend is linked to direct response where search (62%) is the preferred buy. Pre-roll or video ads directly related to video content comprise 4%. Although a tiny fraction of the total this is the area to watch since it has grown a staggering 195% year on year.”

Online video, he said, was outperforming TV in terms of brand awareness partly because of more addressable targeting, less inventory and the need for the viewer to watch video ads to access the content.

“While online is king for direct response it is perceived as less effective for brand building campaigns yet there is no reason why it shouldn’t be more effective than TV given online’s inherent interactivity.”

To that end the UK Online Measurement body, formed last December to specialise in audience planning is now working with Neilsen to deliver APS, a new Audience Planning System designed to provide industry recognised metrics for online video advertising.

“At its core are a 35,000 strong panel of people, 4000 of whom will be tracked at work so we can rate the population engaging online within large organisations and SMEs,” explained Phillipson. “There will be a gold standard of demographic measures attached to their usage including age, income and social grade, postcode and purchase intention.”

Agencies will be able to report passive audience data based on the URL of the video being watched and active data by embedding cookies within video content or video ad inventory.

“For the first time this will give agencies and their clients the confidence of knowing who they are reaching,” he added. The basic system launches in January with active reporting function following in the summer. Google and broadcasters like ITV have signed up to it.

“This will transform the planning for online video campaigns,” predicted Phillipson.